NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Thomas Russell

774 cragmont ave
Berkeley
Ca
94708
Tel: 510 524 9349

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org

NBER Working Papers and Publications

January 1998The Causes and Consequences of Rate Regulation in the Auto Insurance Industry
with Dwight Jaffee
in The Economics of Property-Casualty Insurance, David F. Bradford, editor
September 1995The Causes and Consequences of Rate Regulation in the Auto Insurance Industry
with Dwight Jaffee: w5245
This paper examines various explanations for the increase in the degree of regulation of the auto industry in the last ten years. Using cross section data for the State of California, the paper confirms earlier findings for the State of Massachusetts that the demand for auto insurance is highly price elastic. This implies that regulation induced price rollbacks (such as those mandated by California's popular initiative Proposition 103) have significant welfare effects. We explain the increase in regulation in two ways: a) As an attempt to lower rates to deal with the problem of the uninsured motorist. b) More fundamentally as a response to the perceived lack of fairness of the sharp increase in premiums in the 1980s. This perception of lack of fairness arises because, although auto insur...

Published:

 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us