Jian Xin Hansel TEO will defend his thesis on Monday 5 September at 2:30 PM (Auditorium 3).
« Essays on the economics of insurance markets »
1, Esplanade de l'université, 31000 Toulouse
To attend the conference, please contact the secretariat Ludmila Namolovan
Supervisors: Helmuth Cremer and Jean-Marie Lozachmeur
Memberships are:
- Helmuth CREMER, Toulouse School of Economics, supervisor
- Jean-Marie LOZACHMEUR, CNRS, Toulouse School of Economics, Co-supervisor
- Mathieu LEFEBVRE, Aix-Marseille Université, Rapporteur
- Pierre PESTIEAU, Université de Liège, Rapporteur
- Chiara CANTA, Toulouse Business School, Examinor
- Emmanuel THIBAULT, Université de Perpignan, Examinaor
Abstract :
What affects people’s decision to purchase insurance and what determines if they are insured? This thesis collects three chapters which explore these questions from different perspectives. In Chapter One, I adopt the sufficient-statistics approach to quantify the consumption-smoothing value of long-term care insurance. My analysis extends the cur- rent framework to allow for adjustment costs in consumption and derives a generalised implementation formula for measuring the marginal value of insurance. I then implement the derived measure by using panel data from the Health and Retirement Survey to estimate the implied value of insurance against nursing home episodes. On average, I find that households’ food consumption drops sharply by about 26 per cent during a nursing home episode, while the probability of home liquidation increases by nine percentage points. These estimates imply uninsured people are willing to pay a 60 per cent premium over actuarially fair rates for insurance against nursing home expenses. In Chapter Two, I propose and analyse a monopoly insurance contracting model with unobserved heterogeneity in both risk and preferences for formal insurance. I show that monopoly optima can have partial take-up and adverse selection along either, or both, the intensive and extensive margins. The particular configuration at an optimum depends on the degree of heterogeneity in participation preferences. With a low degree of heterogeneity, all individuals are insured and there is only selection between contracts. When there is a high degree of heterogeneity, there is partial take-up and adverse selection occurs simultaneously between contracts and in take-up. In Chapter Three, I study how imperfect competition affects equilibrium insurance allocations by analysing a model of horizontally-differentiated insurers. I show that equilibrium in this model always features risk separation, with the equilibrium allocation characterised by conditions which capture intensive and extensive margin trade-offs in profit. Consumer surplus is strictly increasing and while the level of coverage provided to low-risks is strictly decreasing in the degree of competition.
