Master of Arts (MA)
First Committee Member
Second Committee Member
Stephen P. Brown
Third Committee Member
Fourth Committee Member
Number of Pages
Spinnewijn (2013) posits that optimism about risk and the efficacy of risk-reducing effort could cause selection in insurance markets. We test for this using a survey of 474 subjects’ demand for hypothetical cancer insurance. We elicit perceptions of baseline cancer risk and control efficacy and combine these with subject-specific cancer risks predicted by the Harvard Cancer Risk Index to develop measures of baseline and control optimism. We find that only 23 percent of our subjects would purchase a fair insurance contract aligned to their true risk type. Of these subjects, 94 percent also overinvest in prevention, leading to advantageous selection.
Adverse Selection; Cancer insurance; Insurance; Insurance Markets; Risk (Insurance); Risk Misperception; Risk perception; Risk-taking (Psychology)
Economics | Insurance | Psychology
University of Nevada, Las Vegas
Hales, David S., "Risk Misperception and Selection in Insurance Markets: An Application to Demand for Cancer Insurance" (2015). UNLV Theses, Dissertations, Professional Papers, and Capstones. 2359.
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