[Seminar] Insurance Design in the Presence of Safety Nets

Posted: 2016-10-10   Visits: 46

Speaker: Dr. Tse-Ling Teh(Post-doc, Grantham Research Institute on Climate Change and the Environment,  London School of Economics and Political Science)

Speaker Intro: Dr. Tse-Ling Teh's personal website

Host: Prof. Nan Zhong

Date: Oct. 13, 2016 (Thursday)

Time: 16:40-18:00

Venue: N303, Econ Building

Organizer: Wang Yanan Institute for Studies in Economics & School of Economics

Description: Safety net assistance and insurance exist to manage risk and improve welfare.  This shared goal may lead to crowding out. In a new approach, this paper  analyzes the interaction of assistance with two dimensions of insurance design:  level of coverage and types of risks covered. In a society of risk averse  vulnerable individuals and risk neutral assistance providers, Pareto  improvements in welfare are achieved through incompleteness in the types of  risks covered. The results imply that safety nets promote demand for and the  emergence of incomplete insurance. These results have a wide application to  insurance markets where safety nets are available, including health care,  disaster aid and social welfare.