Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/253590 
Year of Publication: 
2020
Citation: 
[Journal:] Quantitative Economics [ISSN:] 1759-7331 [Volume:] 11 [Issue:] 3 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2020 [Pages:] 1143-1175
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We use data from a large US life expectancy provider to test for asymmetric information in the secondary life insurance-or life settlements-market. We compare realized lifetimes for a subsample of settled policies relative to all (settled and nonsettled) policies, and find a positive settlement-survival correlation indicating the existence of informational asymmetry between policyholders and investors. Estimates of the 'excess hazard' associated with settling show the effect is temporary and wears off over approximately 8 years. This indicates individuals in our sample possess private information with regards to their near-term survival prospects and make use of it, which has economic consequences for this market and beyond.
Subjects: 
Asymmetric information
life settlements
life expectancy
secondaryinsurance market
JEL: 
D12
G22
J10
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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