IDEAS home Printed from
   My bibliography  Save this paper

La demanda de las AFP chilenas: 1993-2002


  • Iván Marinovic
  • Salvador Valdés



This paper estimates the demand curves faced individually by each pension fund management firm that serves compulsory saving for old age in Chile, in 1993-2002. These firms –Administradoras de Fondos de Pensiones, AFP- sell their services by retail methods, contacting each client separately. The service is also a subscription service, so demand refers both to the inflow of new subscribers and the outflow of separations. The paper presents two specifications with different degrees of aggregation: a panel where for each firm the rival firms are aggregated together, and a more detailed panel for a specific AFP where rival firms are disaggregated. The specific firm is chosen to be a large AFP whose participants have the highest taxable earnings and may be more informed. In the first panel, the finding for 1993-97 is that the effective elasticity of demand faced by each firm is less tan 1.0 (in absolute value). In the panel for relatively more informed participants, the effective elasticity in 1993-97 was slightly larger tan one, implying an optimal margin of 70% above marginal cost. For the period that starts in December 1997, after important regulatory changes, the effective elasticity for the panel for relatively more informed participants fell to 0.10 and in the other panel remained below 1.0. Together, these results show that in Chile competition between pension funds has occurred without competition in prices throughout 1993-2002, and that competition in prices weakened further after 1998.

Suggested Citation

  • Iván Marinovic & Salvador Valdés, 2010. "La demanda de las AFP chilenas: 1993-2002," Documentos de Trabajo 369, Instituto de Economia. Pontificia Universidad Católica de Chile..
  • Handle: RePEc:ioe:doctra:369

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fafchamps & Bernard Gauthier & Jan Willem Gunning & Abena Oduro & Remco Oostendorp & Catherine Pattillo & Måns Soderbom & Francis Teal & Albert Zeu, 2004. "Do African Manufacturing Firms Learn from Exporting?," Journal of Development Studies, Taylor & Francis Journals, vol. 40(3), pages 115-141.
    2. Francisco Maeso-Fernandez & Chiara Osbat & Bernd Schnatz, 2002. "Determinants of the Euro Real Effective Exchange Rate: A BEER/PEER Approach," Australian Economic Papers, Wiley Blackwell, vol. 41(4), pages 437-461, December.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. David Bravo Urrutia & Olivia S. Mitchell & Petra Todd, 2007. "Learning from the Chilean Experience: The Determinants of Pension Switching," Working Papers wp266, University of Chile, Department of Economics.

    More about this item


    Competition; social security; denand estimation; dynamic panels;

    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ioe:doctra:369. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jaime Casassus). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.