Firm-driven Management for Longevity Risk: Analysis of Lump-sum Forward Payments in Japanese Nursing Homes
ã€€ã€€ This paper analyzes a system of insuring longevity risk in Japan using a lump-sum forward payment of rent. The system is unique to the Japanese private nursing home market and forces homes to cover most of the longevity risk of residents. To consider the impact of this system, this study conducts a prediction analysis of a counterfactual situation in which the system is eliminated, based on a structural model for the industrial organization of the private nursing home market. For the prediction analysis, a flexible technique is proposed using a nonparametric Bayesian approach. The results indicate there is an excess consumer payment under the current system, for which the consumer can only be compensated if he or she lives for an unrealistically long time in a nursing home. This result provides rich implications for the amount of longevity risk nursing homes assume, as well as possible consumer welfare to be gained from a government intervention to change the situation.
|Date of creation:||Nov 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.cirje.e.u-tokyo.ac.jp/index.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pradeep Chintagunta & Jean-Pierre Dubé & Khim Yong Goh, 2005. "Beyond the Endogeneity Bias: The Effect of Unmeasured Brand Characteristics on Household-Level Brand Choice Models," Management Science, INFORMS, vol. 51(5), pages 832-849, May.
- Amy Finkelstein & James Poterba, 2004.
"Adverse Selection in Insurance Markets: Policyholder Evidence from the U.K. Annuity Market,"
Journal of Political Economy,
University of Chicago Press, vol. 112(1), pages 183-208, February.
- Amy Finkelstein & James Poterba, 2000. "Adverse Selection in Insurance Markets: Policyholder Evidence from the U.K. Annuity Market," NBER Working Papers 8045, National Bureau of Economic Research, Inc.
- Hanson, Timothy E., 2006. "Inference for Mixtures of Finite Polya Tree Models," Journal of the American Statistical Association, American Statistical Association, vol. 101, pages 1548-1565, December.
- Jeffrey R. Brown & Amy Finkelstein, 2007.
"Why is the market for long-term care insurance so small?,"
in: Trans-Atlantic Public Economics Seminar (TAPES), Public Policy and Retirement, pages 1967-1991
National Bureau of Economic Research, Inc.
- Brown, Jeffrey R. & Finkelstein, Amy, 2007. "Why is the market for long-term care insurance so small?," Journal of Public Economics, Elsevier, vol. 91(10), pages 1967-1991, November.
- Elie Tamer & Federico Ciliberto, 2004.
"Market Structure and Multiple Equilibria in Airline Markets,"
2004 Meeting Papers
52, Society for Economic Dynamics.
- Federico Ciliberto & Elie Tamer, 2009. "Market Structure and Multiple Equilibria in Airline Markets," Econometrica, Econometric Society, vol. 77(6), pages 1791-1828, November.
- Elie Tamer & Federico Ciliberto, 2004. "Market Structure and Multiple Equilibria in Airline Markets," Econometric Society 2004 North American Winter Meetings 517, Econometric Society.
- Ciliberto, Federico & Tamer, Elie, 2009. "Market structure and multiple equilibria in airline markets," MPRA Paper 38635, University Library of Munich, Germany.
- Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-90, July.
- Peter Davis, 2006. "Spatial competition in retail markets: movie theaters," RAND Journal of Economics, RAND Corporation, vol. 37(4), pages 964-982, December.
- Sha Yang & Yuxin Chen & Greg Allenby, 2003. "Bayesian Analysis of Simultaneous Demand and Supply," Quantitative Marketing and Economics, Springer, vol. 1(3), pages 251-275, September.
- Mitchell Olivia S. & PIGGOTT John & SHIMIZUTANI Satoshi, 2004.
"Aged-Care Support in Japan: Perspectives and Challenges,"
ESRI Discussion paper series
118, Economic and Social Research Institute (ESRI).
- Olivia S. Mitchell & John Piggott & Satoshi Shimizutani, 2004. "Aged-Care Support in Japan: Perspectives and Challenges," NBER Working Papers 10882, National Bureau of Economic Research, Inc.
- repec:rje:randje:v:37:y:2006:i:4:p:964-982 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:tky:fseres:2013cf908. 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: (CIRJE administrative office)
If references are entirely missing, you can add them using this form.