The Welfare Loss of Excess Nonprice Competition: The Case of Property-Liability Insurance Regulation

摘要: IN recent years, a number of economists have called for deregulation prices in many essentially competitive industries. Rarely has there been any actual change policy. One exception however is the property and liability insurance industry, which experiencing massive rate-deregulation movement.' Between 1947 1974, fifteen states deregulated rates all or part industry.2 This provides natural laboratory examining effect price regulation potentially In this paper, we will measure welfare loss associated with rate industry. Such an examination complicated by increased nonprice competition stimulated regulation.3 Therefore, heart paper straightforward econometric model demand property-liability allows measurement consumer gain due to competition, as well resulting from higher regulatory pricing.4