Multiple Dimensions of Private Information: Evidence from the Long-Term Care Insurance Market
证明长期护理保险市场中存在多重私人信息：购买保险的人要么是高风险者，要么是偏好保险者。前者事后风险高于保险公司预期，后者则更低，导致保险覆盖与风险发生之间无正相关，但信息不对称依然存在。
We demonstrate the existence of multiple dimensions of private information in the long-term care insurance market.Two types of people purchase insurance: individuals with private information that they are high risk and individuals with private information that they have strong taste for insurance.Ex post, the former are higher risk than insurance companies expect, while the latter are lower risk.In aggregate, those with more insurance are not higher risk.Our results demonstrate that insurance markets may suffer from asymmetric information even absent a positive correlation between insurance coverage and risk occurrence.The results also suggest a general test for asymmetric information.Theoretical research has long emphasized the potential importance of asymmetric information in impairing the efficient operation of insurance markets.Several recent studies in different insurance markets, however, have found no evidence to support the central prediction of many asymmetric information models that those with more insurance should be more likely to experience the insured risk. 1 In this paper, we use a new method to test for the presence of asymmetric information in the long-term care insurance market in the United States.We use individuals' subjective assessments of the chance they will enter a nursing home to show that, conditional on the insurance companies' own assessment of the individuals' risk type, individuals have residual private information that predicts their eventual risk.Moreover, this residual private information is also positively correlated with insurance coverage.Combined, these two findings provide direct evidence of asymmetric evidence in the long-term care insurance market.