Adverse selection in annuity markets: Evidence from the British Life Annuity Act of 1808

A-Tier
Journal: Journal of Public Economics
Year: 2009
Volume: 93
Issue: 5-6
Pages: 776-784

Score contribution per author:

4.022 = (α=2.01 / 1 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We study adverse selection using data from an 1808 Act of British Parliament that effectively opened a market for life annuities. Our analysis indicates significant selection effects. The evidence for adverse selection is strongest for a sub-sample of annuitants whose annuities were purchased by profit-seeking speculators, a sub-sample in which "advantageous selection" resulting from multi-dimensional heterogeneity is unlikely to have been significant. These results support the view that adverse selection can be masked by advantageous selection in empirical studies of standard insurance markets.

Technical Details

RePEc Handle
repec:eee:pubeco:v:93:y:2009:i:5-6:p:776-784
Journal Field
Public
Author Count
1
Added to Database
2026-01-29