Abstract
| Original language | English |
|---|---|
| Journal | Empirical Economics |
| Number of pages | 27 |
| ISSN | 0377-7332 |
| DOIs | |
| Publication status | Published - 11 Feb 2019 |
Bibliographical note
Epub ahead of print. Published online: 11. February 2019Keywords
- Asymmetric information
- Advantageous selection
- Adverse selection
- Dental insurance
- Supplemental health insurance
Cite this
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Heterogeneous Selection in the Market for Private Supplemental Dental Insurance : Evidence from Germany. / Bauer, Jan Michael; Schiller, Jörg; Schreckenberger, Christopher.
In: Empirical Economics, 11.02.2019.Research output: Contribution to journal › Journal article › Research › peer-review
TY - JOUR
T1 - Heterogeneous Selection in the Market for Private Supplemental Dental Insurance
T2 - Evidence from Germany
AU - Bauer, Jan Michael
AU - Schiller, Jörg
AU - Schreckenberger, Christopher
N1 - Epub ahead of print. Published online: 11. February 2019
PY - 2019/2/11
Y1 - 2019/2/11
N2 - This paper analyzes the German market for supplemental dental insurance to identify selection behavior based on individuals’ private information. The rather limited underwriting by German private health insurers makes this market especially prone to selection effects. Although the standard positive correlation test does not indicate asymmetric information in this market, we conjecture that this outcome may result from sample heterogeneity when adverse and advantageous selection occur simultaneously and offset each other. Examining a large set of potential sources of selection effects, we find mainly that the holding of other supplemental health insurance policies, which is related to risk preferences, contributes to an advantageous selection in this insurance market. Our results suggest that even in the absence of a positive correlation between risk and insurance coverage, the German market for supplemental dental insurance suffers from information asymmetry, which is caused by multidimensional private information.
AB - This paper analyzes the German market for supplemental dental insurance to identify selection behavior based on individuals’ private information. The rather limited underwriting by German private health insurers makes this market especially prone to selection effects. Although the standard positive correlation test does not indicate asymmetric information in this market, we conjecture that this outcome may result from sample heterogeneity when adverse and advantageous selection occur simultaneously and offset each other. Examining a large set of potential sources of selection effects, we find mainly that the holding of other supplemental health insurance policies, which is related to risk preferences, contributes to an advantageous selection in this insurance market. Our results suggest that even in the absence of a positive correlation between risk and insurance coverage, the German market for supplemental dental insurance suffers from information asymmetry, which is caused by multidimensional private information.
KW - Asymmetric information
KW - Advantageous selection
KW - Adverse selection
KW - Dental insurance
KW - Supplemental health insurance
KW - Asymmetric information
KW - Advantageous selection
KW - Adverse selection
KW - Dental insurance
KW - Supplemental health insurance
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U2 - 10.1007/s00181-019-01632-5
DO - 10.1007/s00181-019-01632-5
M3 - Journal article
JO - Empirical Economics
JF - Empirical Economics
SN - 0377-7332
ER -