Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
969726 | Journal of Public Economics | 2014 | 8 Pages |
Abstract
Some risky activities are optional, for example motoring. Participation in them is most attractive for good risks, creating a tendency for advantageous selection in the associated insurance market. Taxing insurance consequently yields deadweight gains when type is hidden. Results are strengthened if optimism is present. Finally, endogenising participation implies that the standard “positive correlation” test for the presence of policy relevant asymmetric information may fail.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
David de Meza, Gang Xie,