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ERIC Number: EJ696082
Record Type: Journal
Publication Date: 2004-Feb-1
Pages: 26
Abstractor: Author
Reference Count: N/A
ISSN: ISSN-0022-3808
Adverse Selection in Insurance Markets: Policyholder Evidence from the U.K. Annuity Market
Finkelstein, Amy; Poterba, James
Journal of Political Economy, v112 n1 p183 Feb 2004
We use a unique data set of annuities in the United Kingdom to test for adverse selection. We find systematic relationships between ex post mortality and annuity characteristics, such as the timing of payments and the possibility of payments to the annuitant's estate. These patterns are consistent with the presence of asymmetric information. However, we find no evidence of substantive mortality differences by annuity size. These results suggest that the absence of selection on one contract dimension does not preclude its presence on others. This highlights the importance of considering detailed features of insurance contracts when testing theoretical models of asymmetric information.
University of Chicago Press, Journals Division, P.O. Box 37005, Chicago, IL 60637. Tel: 773-753-3347; Web site:; e-mail:
Publication Type: Journal Articles; Reference Materials - General
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Identifiers - Location: United Kingdom