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

Dataset
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 British Household Panel Survey (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.

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Journal article
We test for asymmetric information in the UK private health insurance (PHI) market.
IFS Working Paper W06/02
We develop a test for adverse selection and use it to examine private health insurance markets.