Research Repository

Why Is Automobile Insurance In Philadelphia So Damn Expensive?

Smith, E and Wright, R (1990) Why Is Automobile Insurance In Philadelphia So Damn Expensive? UNSPECIFIED. Hoover Institution, Stanford University, Working Papers e-90-4.

Full text not available from this repository.


The authors document and attempt to explain the observation that automobile insurance premiums vary dramatically across cities. The authors argue that high premiums can be attributed, at least in part, to large numbers of uninsured motorists in some markets, while uninsured motorists can be attributed to high premiums. The authors construct a simple noncooperative equilibrium model that can generate inefficient equilibria with uninsured drivers and high, yet actuarially fair, premiums. For certain parameterizations, an efficient full-insurance equilibrium and inefficient high-price equilibria with uninsured drivers exist simultaneously, helping to explain price variability across otherwise similar cities. Policy implications are discussed.

Item Type: Monograph (UNSPECIFIED)
Uncontrolled Keywords: insurance ; automobiles ; vehicles ; expenditures
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 29 Jun 2012 11:05
Last Modified: 17 Aug 2017 18:11

Actions (login required)

View Item View Item