The Effects of Compensation for Uninsured but Insurable Losses
研究了慈善或公共部门对未投保但可保损失提供补偿的影响，分析其对私人保险市场、个人保险选择、预防行为及最优援助形式的潜在效应。
Although the insurance literature has expanded dramatically in the past few years, the effects of charitable or public sector provision of compensation for those who have suffered an insurable but uninsured loss have not been explored. Of course, such compensation will have an impact on private sector insurers but the effects of compensation also may become increasingly important for the public sector if the number of public sector insurance schemes or insurance programs subsidized by the public sector continues to grow. The possible effects of compensation are easily seen if we consider the following example. Suppose that a group of individuals who satisfy some criterion of need, say low income, know that if they become ill some portion of insurable medical costs which they have chosen not to insure will be paid for by a charity or some government transfer program. Given this arrangement, we can ask a number of questions about its effects on insurance markets and about the optimality of such an arrangement relative to other types of aid programs. First, how will eligible individuals alter their insurance coverage? Second, will this sort of compensation make it possible to differentiate among individuals on the basis of the risk they face? This question is related to the much discussed problem of adverse selection in insurance markets (Cook and Graham [21, Ehrlich and Becker [3], Pauly [8], Rothschild and Stiglitz [9], Wilson [10]). Third, how will compensation affect the level of preventive activity undertaken by an eligible individual? Put differently, if an apple a day keeps the doctor away, will eligible individuals consume only half an apple? This possibility of moral hazard has also been discussed at some length in the insurance literature (Arrow [1], Ehrlich and Becker [3], Marshall [6], Pauly [7], Zeckhauser [1 1]). Finally, if donors (taxpayers) could choose the manner in which eligible individuals received aid, would donors prefer to provide compensation for uninsured losses or would they prefer to use insurance subsidies? Whether or not insurance subsidies should be used instead of compensation in the event of