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on Insurance Economics |
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Issue of 2010‒08‒14
five papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Bussiness Management |
| By: | Shimeles, Abebe (Development Research Department African Development Bank) |
| Abstract: | Community-based health insurance schemes (Mutuelles) in Rwanda are one of the largest experiments in community based risk-sharing mechanisms in Sub-Saharan Africa for health related problems. This study examines the impact of the program on demand for modern health care, mitigation of out-of-pocket catastrophic health expenditure and social inclusiveness based on a nationally representative household survey using traditional regression approach and matching estimator popular in the evaluation literature. Our findings suggest that Mutuelles have been successful in increasing utilization of modern health care services and reducing catastrophic health related expenditure. According to our preferred method, higher utilization of health care services was found among the insured non-poor than insured poor households, with comparable effect in reducing health-related expenditure shocks. This reinforces the inequity already inherent in the Mutuelles system.<p> |
| Keywords: | demand for health services; catastrophic health expenditure; average treatment effects; endogenous dummy variable; matching estimator |
| JEL: | I10 |
| Date: | 2010–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0463&r=ias |
| By: | Darius N. Lakdawalla; Wesley Yin |
| Abstract: | Public financing of private health insurance may generate external effects beyond the subsidized population, by influencing the size and bargaining power of health insurers. We test for this external effect in the context of Medicare Part D. We analyze how Part D-related insurer size increases impacted retail drug prices negotiated by insurers for their non-Part D commercial market. On average, Part D lowered retail prices for commercial insureds by 5.8% to 8.5%. The cost-savings to the commercial market amount to $3bn per year, which approximates the total annual savings experienced by Part D beneficiaries who previously lacked drug coverage. |
| JEL: | H57 I11 I18 L11 L51 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16251&r=ias |
| By: | Greg Kaplan |
| Abstract: | This paper uses an estimated structural model to argue that the option to move in and out of the parental home is an important insurance channel against labor market risk for youths who do not attend college. Using data from the NLSY97, I construct a new monthly panel of parent-youth coresidence outcomes and use it to document an empirical relationship between these movements and individual labor market events. The data is then used to estimate the parameters of a dynamic game between youths and their altruistic parents, featuring coresidence, labor supply and savings decisions. Parents can provide both monetary support through explicit financial transfers, and non-monetary support in the form of shared residence. To account for the data, two types of exogenous shocks are needed. Preference shocks are found to explain most of the cross-section of living arrangements, while labor market shocks account for individual movements in and out of the parental home. I use the model to show that coresidence is a valuable form of insurance, particularly for youths from poorer families. The option to live at home also helps to explain features of aggregate data for low-skilled young workers: their low savings rates and their relatively small consumption responses to labor market shocks. An important implication is that movements in and out of home can reduce the consumption smoothing benefits of social insurance programs. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:449&r=ias |
| By: | Paolo Fegatelli |
| Abstract: | This study shows how the misconception of the option value of deposit insurance by Merton (1977) and its later misuse by Keeley and Furlong (1990), among others, have led some literature supporting the adoption of binding non-risk-based capital requirements to derive incorrect conclusions about their efficacy. This study further shows that what Merton defines as the option value of deposit insurance is actually a component of a bank?s limited liability option under a third-party deposit guarantee. As such, it is already included in the value of the bank?s equity capital, and the flawed definition makes the Keeley-Furlong model internally incoherent. |
| Keywords: | Capital requirements, Credit risk, Deposit insurance, Prudential regulation, Portfolio approach |
| JEL: | G21 G28 G11 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:bcl:bclwop:cahier_etudes_46&r=ias |
| By: | Helland, Eric; Klick, Jonathan |
| Abstract: | In the United States insurance is regulated both by state insurance commissions and class action litigation. The interaction of these two systems has not been extensively studied. We examine four different facets of the regulation litigation tradeoff. The first is to examine whether regulator’s interest in a particular cause of action reduces the likelihood that class actions covering this cause of action will be filed in the regulator’s home state. We also examine several measures of regulatory stringency in the state to determine whether there is a substitution effect between regulatory action and litigation. We also examine whether class actions are less frequent when regulators issued an administrative decision on a particular issue previously or if there are no existing state laws on the particular issue. We examine the impact of electing judges on patterns of filing. The hypothesis is that elected judges are more sympathetic to plaintiffs and hence class actions are more likely to be filed in states that elect their judges. Lastly, we examine the impact of pervious litigation both in the state and the specific line of litigation. |
| Keywords: | Other Topics |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:reg:rpubli:32&r=ias |