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on Insurance Economics |
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Issue of 2006‒08‒12
six papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Bussiness Management |
| By: | Rosalind L. Bennett; Mark D. Vaughan; Timothy J. Yeager |
| Keywords: | Banks and banking ; Financial institutions ; Deposit insurance |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlsp:2005-01&r=ias |
| By: | Machiel van Dijk; MIchiel Bijlsma; Marc Pomp |
| Abstract: | What factors determine how well consumers make their actual choices with regard to financial products? This paper empirically evaluates two different choices consumers make when buying deferred annuities. One choice concerns the type of insurance policy, the other concerns the choice of insurance provider. For both choices we will analyse what factors explain the quality of the choice made. In particular, we will investigate the role of financial advice in the decision making process. By combining Dutch consumer survey data and data on quotations by Dutch life insurance companies, we obtain the following results. First, respondents who buy their policy directly from an insurer attain a significantly better match between their risk preferences and the type of policy chosen than respondents who purchase their policy through an insurance broker. Second, respondents who buy their policy through an insurance broker obtain a significantly lower pay-out than respondents who purchased their policy directly from an insurance company. These results raise doubts about the functioning of both the market for financial advice and the market for life insurances. |
| Keywords: | Financial advice; life insurances; choice behaviour |
| JEL: | D12 G22 L84 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:66&r=ias |
| By: | Uwe Dulleck (Department of Economics, Johannes Kepler University Linz, Austria); Paul Frijters (Queensland University of Technology); Konrad Podczeck (University of Vienna) |
| Abstract: | We study all-pay auctions with budget-constrained bidders who have access to fair insurance before bidding simultaneously over a prize. We characterize a unique equilibrium for the special cases of two bidders and one prize, show existence and a heuristic for finding an equilibrium in the case of multiple bidders and multiple prizes. We end with an example of non-uniqueness of equilibria for the general case of multiple prizes and multiple players. |
| Keywords: | all-pay auctions; fair lotteries; political campaigning; oligopoly; regional competition; patent races |
| JEL: | C72 D72 D42 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2006_13&r=ias |
| By: | James Marton (University of Kentucky); Stephen A. Woodbury (Michigan State University and W.E. Upjohn Institute for Employment Research) |
| Abstract: | Employer-provided health benefit coverage for workers who retire before age 65 has fallen over the last decade. We examine a cohort of male workers from the Health and Retirement Survey to examine questions about the dynamics of retiree health benefits and the relationship between retiree health benefits and retirement behavior, which is important for the debate over increasing health coverage for older Americans without reducing work incentives. On dynamics, we find that between 1992 and 1996, 24 percent of full-time workers who had retiree health benefits lost their coverage, while 15 percent of full-time workers who lacked coverage gained it. Also, of the full-time employed men who were covered by retiree health benefits in 1992 and had retired by 1996, 3 percent were uninsured, and 15 percent were covered by health insurance other than employer-provided insurance. On the relationship between retiree health benefits and retirement, we find that workers with retiree benefits were 29 to 55 percent more likely to retire than those without. We also find that workers who are eligible for retiree health benefits tend to take advantage of them when they are relatively young. |
| Keywords: | Marton, Woodbury, health insurance, employee benefits, retirement, elderly, employment, retiree health benefits |
| JEL: | J26 J32 J33 I18 M52 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:06-128&r=ias |
| By: | Shuaizhang Feng (Shanghai University of Finance and Economics); Donald O. Parsons (George Washington University and IZA Bonn) |
| Abstract: | Displaced workers, especially long tenured workers, face large human capital losses. Private firms frequently offer insurance against this threat in the form of severance pay – scheduled benefits linked in expectation to the worker’s human capital loss. We explore this linkage, first reviewing common severance benefit algorithms and then comparing them with simple models of capitalized job displacement losses on data from the Displaced Worker Surveys of 2000 and of 2004. The standard benefit formula of one week’s pay per year of service offers payments roughly in proportion to expected capital losses, but with a proportionality factor of only one quarter of capitalized losses (at 9 percent). Despite the systematic relationship between tenure/age and displacement losses, these factors explain little of the total variation in displacement losses, raising obvious insurance efficiency concerns. Cross-sectional estimates from more complete models, however, uncover no admissible factors currently neglected in standard severance contracts, although the jump in earnings losses between displacements in the robust market of 1997-1999 and the difficult labor market of 2000-2003 does suggest conditioning benefits on market conditions. |
| Keywords: | job displacement, severance pay, unemployment insurance |
| JEL: | J65 J41 J33 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2238&r=ias |
| By: | Bhat Ramesh; Singh Amarjit; Maheshwari Sunil; Saha Somen |
| Abstract: | Government of Gujarat announced a “Chiranjeevi Yojana” in April 2005. The objective of this scheme is to encourage private medical practitioners to provide maternity health services in remote areas which record the highest infant and maternal mortality and thereby improve the institutional delivery rate in Gujarat. The scheme was finally launched as a one year pilot project in December 2005 in five districts viz., Banaskantha, Dahod, Kutch, Panchmahal, and Sabarkantha. The private empanelled providers are reimbursed on capitation payment basis according to which they are reimbursed at a fixed rate for deliveries carried out by them. The payments are made for a batch of 100 deliveries. This is expected to take care of case-mix differences (i.e., normal or complicated deliveries) and help the providers to keep the costs below the reimbursed amounts. The scheme proposes to use a voucher system to target the people living below poverty line. The objective of this paper is to document the experience in implementing this scheme and discuss the issues in up-scaling it further. |
| Date: | 2006–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2006-08-03&r=ias |