320 Ste-Catherine East Street
Montréal (Québec) Canada H2X 1L7
Institutional Affiliation: ESG UQAM
Information about this author at RePEc
NBER Working Papers and Publications
|October 2017||Long-Term Care Insurance: Knowledge Barriers, Risk Perception and Adverse Selection|
with , , , : w23918
We conduct a stated-choice experiment where respondents are asked to rate various insurance products aimed to protect against financial risks associated with long-term care needs. Using exogenous variation in prices from the survey design, and objective risks computed from a dynamic microsimulation model, these stated-choice probabilities are used to predict market equilibrium for long-term care insurance using the framework developed by Einav et al. (2010). We investigate in turn causes for the low observed take-up of long-term care insurance in Canada despite substantial residual out-of-pocket financial risk. We first find that awareness and knowledge of the product is low in the population: 44% of respondents who do not have long-term care insurance were never offered this type of insur...