Replication data for: Beyond Statistics: The Economic Content of Risk Scores

Principal Investigator(s): View help for Principal Investigator(s) Liran Einav; Amy Finkelstein; Raymond Kluender; Paul Schrimpf

Version: View help for Version V1

Name	File Type	Size	Last Modified
Supplementary_Material			10/12/2019 01:07:PM
LICENSE.txt	text/plain	14.6 KB	10/12/2019 09:07:AM

Project Citation:

Einav, Liran, Finkelstein, Amy, Kluender, Raymond, and Schrimpf, Paul. Replication data for: Beyond Statistics: The Economic Content of Risk Scores. Nashville, TN: American Economic Association [publisher], 2016. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E113643V1

Project Description

Summary: "Big data" and statistical techniques to score potential transactions have transformed insurance and credit markets. In this paper, we observe that these widely-used statistical scores summarize a much richer heterogeneity, and may be endogenous to the context in which they get applied. We demonstrate this point empirically using data from Medicare Part D, showing that risk scores confound underlying health and endogenous spending response to insurance. We then illustrate theoretically that when individuals have heterogeneous behavioral responses to contracts, strategic incentives for cream-skimming can still exist, even in the presence of "perfect" risk scoring under a given contract. (JEL C55, G22, G28, H51, I13)

Scope of Project

JEL Classification:
      C55 Large Data Sets: Modeling and Analysis
      G22 Insurance; Insurance Companies; Actuarial Studies
      G28 Financial Institutions and Services: Government Policy and Regulation
      H51 National Government Expenditures and Health
      I13 Health Insurance, Public and Private

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V1 [2019-10-12]

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