In:
American Economic Journal: Economic Policy, American Economic Association, Vol. 12, No. 3 ( 2020-08-01), p. 134-169
Abstract:
This paper conducts 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. Our results are twofold. First, information frictions are pervasive. Second, measuring the welfare losses associated with frictions in a framework that also allows for selection, it is found that information frictions reduce equilibrium take-up and lead to large welfare losses, while selection plays little role. (JEL D82, D83, G22, I13)
Type of Medium:
Online Resource
ISSN:
1945-7731
,
1945-774X
DOI:
10.1257/pol.20180227
Language:
English
Publisher:
American Economic Association
Publication Date:
2020
detail.hit.zdb_id:
2442382-8
detail.hit.zdb_id:
2452647-2
Permalink