Browsing by Subject "Adverse Selektion"

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Economic analysis of organic certification systems : determinants of non-compliance and optimum control strategies
(2012) Zorn, Alexander; Dabbert, Stephan
Organic certification systems are prerequisite for the existence of a large-scale organic food market. Despite a well-established and generally effective control system, fraud regarding organic food that passed organic controls is detected regularly. This cumulative thesis consisting of four articles addresses current questions regarding the improvement of organic certification systems. The need for governmental supervision of an organic certification system run by private control bodies is demonstrated by a game theoretic model. A framework prepares the statistical analysis by conceptually linking factors that can influence organic control results. The case study on German supervision data from the years 2006 to 2008 reveals significant differences between private control bodies regarding the number of severe sanctions imposed, i.e. fundamental control results. These data that were collected for supervision of the control system, however, are not sufficient to explain these differences. This is due to shortcomings in the data collected. Key terms of the data are not defined and the variable definitions seem to change over time. This study concludes that there is more detailed and reliable data from organic control bodies needed to understand the determinants of non-compliance with an organic standard. Detailed data on organic farm controls from the years 2007 to 2009 were supplied by two control bodies. Theoretical considerations founded on the ?Economics of Crime? approach yield hypotheses on factors affecting non-compliance with an organic standard. The data provided by a German and a Swiss control body are analysed by two different logistic regression models. The probability of receiving a sanction (which is used as proxy for non-compliance) is estimated on farm level by using data on farm and farm production. Such an approach to assess the determinants of non-compliance has not been used previously in the literature. Given the gradual sanction system, an ordinal logistic regression model is appropriate for the analysis of the German data. Swiss data are analysed by a random effects logistic regression model. Both models confirm some of the factors contributing to the risk of non-compliance that are applied in qualitative risk assessment so far. Control results from previous years, the overall farm complexity and the farm livestock production complexity, as well as farm size are factors that increase the probability of receiving a sanction. Risks connected to specific crops or livestock types that could come along, e.g., with particular requirements of the production method cannot be confirmed across the models. The explanatory value of both models is likely to be improved by the integration of further variables, such as data on farmers? personal and financial characteristics. The heuristic model builds on the results of the econometric models. This model adopts a societal view on the control system by considering the costs of controls and the damages resulting from non-compliance with an organic standard. Monte-Carlo simulations illustrate the relationship between important parameters for optimising control strategies. These simulations show that even without fines a situation can occur where most operators comply. The different approaches to analyse control data encounter difficulties inherent to the control data. In this context, the dark figure consisting of undetected non-compliances, inhomogeneous detection probabilities linked to particular production methods, and a potential positive confirmation bias connected to the risk based control approach are especially relevant. The working hypothesis that these potential biases are distributed randomly deserves closer attention in subsequent studies. Such future analysis should be based on even more detailed data, e.g., pooling original data from different control bodies in a control system. Such a data base would allow focusing on severe non-compliances which occur only rarely. Furthermore, pooled data could be used to investigate issues that are fundamental for the supervision of a control system such as a control body effect on the detection of non-compliance. This thesis presents important results that can be consulted for further analysis of organic control systems. Beyond, the approach, the methods used, and the results obtained are of general relevance for food certification systems beyond the organic sector.
Essays on long-term care and health insurance
(2018) Schreckenberger, Christopher Karl Ludwig; Schiller, Jörg
This thesis contributes to the literature on the impact of two individual options that may help to alleviate the financial pressure on the public sector with respect to health and long-term care expenditures. A particular focus is on the German health insurance and long-term care insurance (LTCI) system. The first option refers to the shifting of LTCI and health insurance coverage from a public system to markets for voluntary private health insurance (VPHI) and private LTCI. These private insurance markets may suffer from inefficiencies due to asymmetric information and selection effects, such as adverse selection. Hence, three papers in this thesis analyze selection effects in markets for VPHI and private LTCI. The first paper (chapter 2) reviews the empirical work on asymmetric information and related selection effects in markets for private LTCI and in the U.S. market for Medigap insurance. After providing an overview of the existence of selection effects in these markets, the review examines the evidence on several potential sources of selection. Regarding the latter, a focus is on the role of private information that individuals have on their risk type, on the role of the individual’s risk preferences and of sociodemographic characteristics. Following the review, two empirical papers analyze selection effects in the German markets for complementary private LTCI (chapter 3) and for supplemental dental insurance (chapter 4). Both markets have in common that they provide voluntary private insurance coverage for residual out-of-pocket expenditure risks not covered by statutory LTCI or health insurance in Germany. In addition, the ex-ante premium differentiation is rather limited in these markets. This makes these markets prone to selection effects. Using a large dataset on more than 98,000 individuals from a German private insurance company, the findings in chapter 3 suggest that advantageous selection is the dominating type of selection in the German market for complementary private LTCI. Examining potential drivers for selection, the analysis indicates that the occupation as well as the residential location are observable characteristics that are not used for pricing, but that contribute to advantageous selection through the socioeconomic status. The holding of supplemental health insurance policies is another observable attribute that affects the selection behavior. Analyzing the selection behavior within a dynamic framework, the analysis shows that the uptake and the cancellation of LTCI policies are associated with changes in health insurance payouts. Moreover, individuals with financial problems and with a lower socioeconomic status are more likely to drop complementary LTCI coverage. Based on survey data from the Healthcare Monitor of the Bertelsmann Stiftung, the findings in chapter 4 do not reveal a significant correlation between insurance coverage and risk in the market for supplemental dental insurance in Germany. Since one possible explanation for this finding is heterogeneous selection leading to an offsetting of adverse and advantageous selection, a large set of potential sources of selection effects is tested. The results indicate that the holding of other supplemental health insurance policies is a main driver for advantageous selection in this market. The findings in this chapter provide solid evidence that this insurance market suffers from asymmetric information and selection effects even though the correlation between insurance coverage and risk is not statistically significant. Instead of shifting insurance coverage to a private insurance system, another option to alleviate the financial burden in a public health insurance system, which is analyzed in this thesis, refers to the promotion of preventive health care. Specifically, the fourth paper (chapter 5) empirically examines the effectiveness of a nationwide population-based skin cancer screening (SCS) program that was implemented in Germany in 2008. To this end, panel data from 2000 to 2013 of the Eurostat database on subregions in 22 European countries are exploited. Using fixed effects methods, the results show a positive and robust effect of the German SCS program on the diagnosis rate for malignant skin neoplasms, but no significant impact on the melanoma mortality rate. The former suggests that this program is effective in terms of an increased diagnosis rate for malignant skin neoplasms and may therefore contribute to an improved detection of skin cancer at an early stage.