Testing for Asymmetric Information in Private Health Insurance, 1996-2008

This project developed a test for asymmetric information in the UK private health insurance (PHI) market. In contrast to earlier research that considered either a purely private system or one where private insurance is complementary to public insurance, PHI is substitutive of the public system in the UK. Using a theoretical model of competition among insurers incorporating this characteristic, the project linked the type of selection (adverse or propitious) with the existence of risk-related information asymmetries. Using the <i>British Household Panel Survey</i> (BHPS) (held at the UK Data Archive under SN 5151), evidence was found that adverse selection is present in the PHI market, which led to the conclusion that such information asymmetries exist.<br> <br> Further information may be found in the journal article that uses these data: <br> Olivella, P. and Vera-Hernandez, M. (2012) 'Testing for asymmetric information in private health insurance', <i>Economic Journal</i>, retrieved September 3, 2012 from <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0297.2012.02520.x/full" title="'Testing for asymmetric information in private health insurance">http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0297.2012.02520.x/full</a> (may require subscription).<br> <br>