Identifying Moral Hazard in Car Insurance Contracts

Submitted on 23rd November 2018
Source
academic

This paper capitalizes on a unique situation in Israel where car insurance coverage is often distributed as a benefit by employers. Employer-determined coverage creates variation in accident costs that are not a function of individual choice. Using instrumental variable analysis on data provided by an insurance firm in Israel (2001-2008), research shows that a $100 discount in accident costs increases the probability of an accident by 3.4-3.7 percentage points.

Source
The Hebrew University
Length of Resource
39 pages
Author
Sarit Weisburd
Date Published
Publication Type
paper
Resource Type
academic