Faculty of Social Science
Department of Economics
Ph.d candidate in Economics.
The Hebrew University of Jerusalem
Department of Economics
Mount Scopus Campus
Jerusalem, Israel 91905
Applied Econometrics, Applied Industrial Organization, Health Economics, Labor Economics
This paper capitalizes on a unique situation in Israel where car insurance coverage is often distributed as a benefit by employers. Employer-determined coverage creates an environment where individuals are "as if" randomly allocated to different insurance contracts regardless of their preferences. In this situation, the confounding effects of adverse selection are removed, and the effect of car insurance on driving behavior and on car accidents reflects moral hazard. Using data provided by an insurance firm in Israel (2001-2008) and controlling for state dependence and unobserved heterogeneity, I find that employees benefiting from company insurance -- holding higher insurance coverage at a lower cost -- are 1.7 percentage points more likely to have an accident. This estimate increases when considering a subsample of newly insured employees.These results can be interpreted as the effect of moral hazard on car accidents.
Works In Progress
The Effects of Increased Police Presence on Driving Behavior
In 1968, Becker introduced a model where a person commits a crime if the expected utility of the crime exceeds the utility of using his/her time and resources for another activity. Becker's model predicts that increasing police presence, increases the probability of punishment, and will result in fewer accidents. In this paper we focus on identifying the mechanism through which deterrence affects behavior. Increasing police presence may cause drivers to be more cautious at the given location and time at which police become visible (immediate effect). Additionally, individuals may alter their expectations of "the probability of punishment" in the future as a result of an increase in police presence (long-term effect). The data analyzed in this study was from geographic locators placed in all police vehicles in Dallas, Texas over a one year period. We apply survival analysis to estimate the effect of police presence on the interval of time over which an area remains accident free.
Can the Right of First Refusal Increase Driving Care? The Case of Vehicle Leasing Contracts in Israel.
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