Long-Term Care Insurance: Information Frictions and Selection

Boyer, Martin, De Donder, Philippe, Fluet, Claude, Leroux, Marie-Louise and Michaud, Pierre-Carl (2019) Long-Term Care Insurance: Information Frictions and Selection. TSE Working Paper, n. 19-1034, Toulouse

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Official URL: http://tse-fr.eu/pub/123346

Abstract

We conduct a stated-choice experiment where respondents are asked to rate various insurance products aimed to protect against financial risks associated with long-term care needs. Using exogenous variation in prices from the survey design and individual cost estimates, these stated-choice probabilities are used to predict market equilibrium for long-term care insurance. We find that information frictions are pervasive. We measure the welfare losses associated with these three causes in a framework that also allows for selection. We show that information frictions
reduce equilibrium take-up and lead to large welfare loss while selection plays little role.

Item Type: Monograph (Working Paper)
Language: English
Date: September 2019
Place of Publication: Toulouse
Uncontrolled Keywords: Long-term care insurance, adverse selection, stated-preference, health, insurance
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 04 Sep 2019 07:42
Last Modified: 04 Sep 2019 07:42
OAI ID: oai:tse-fr.eu:123346
URI: http://publications.ut-capitole.fr/id/eprint/32728

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