Do people drive safer when accidents are more expensive : Testing for moral hazard in experience rating schemes (CROSBI ID 216753)
Prilog u časopisu | izvorni znanstveni rad | međunarodna recenzija
Podaci o odgovornosti
Vukina, Tomislav ; Nestić, Danijel
engleski
Do people drive safer when accidents are more expensive : Testing for moral hazard in experience rating schemes
Using individual policies and claims data from the Croatian mandatory motor insurance we test the theoretical proposition that under moral hazard, experience rated pricing scheme should generate the negative state dependence in claims, i.e. that drivers should drive more safely after they had an accident. The empirical challenge in these tests is to disentangle the state dependence from unobserved heterogeneity. We propose a simple approach based on the explicit reliance on the cost of future accidents function which is used to filter out the pure incentives effect, whereas the bonus-malus scale is used to control for pure heterogeneity. Our results confirm the existence of negative dependence in claims indicating the presence of significant moral hazard effect. Increasing a 3-year cost of having an accident by approximately US$20 decreases the probability of having an accident by 6.5%.
Asymmetric information; Incentives; Road safety; Insurance
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Podaci o izdanju
71
2015.
46-58
objavljeno
0965-8564
10.1016/j.tra.2014.10.024
Povezanost rada
Tehnologija prometa i transport, Ekonomija