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Workers' Compensation And Moral Hazard

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  • DIONNE, G.
  • ST-MICHEL, P.

Abstract

Two types of moral hazard have been determined. The first type is related to self-prevention activities affecting probabilities of accidents. The second type relates to the agent's activities whenever the accident occurs. The authors' objective consists of presenting an empirical measure of the significance of this second type of moral hazard in the workers' compensation market. The main challenge in isolating moral hazard consists of dividing into two parts the total variation in recovery time with respect to changes in insurance coverage: (1) the variation of consumption corresponding to a given level of information; and (2) the variation of consumption due to greater asymmetrical information. The methodology used in this study separates these two variations. Copyright 1991 by MIT Press.
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Suggested Citation

  • Dionne, G. & St-Michel, P., 1988. "Workers' Compensation And Moral Hazard," Cahiers de recherche 8831, Centre interuniversitaire de recherche en ├ęconomie quantitative, CIREQ.
  • Handle: RePEc:mtl:montec:8831
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    References listed on IDEAS

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    1. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
    2. Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, vol. 55(1), pages 43-68, January.
    3. Kim, Moshe, 1984. "The Beneficiaries of Trucking Regulation, Revisited," Journal of Law and Economics, University of Chicago Press, vol. 27(1), pages 227-241, April.
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    Keywords

    moral hazard ; workers;

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