Discussion of Levon Barseghyan and Francesca Molinari’s “Risk Preference Types, Limited Consideration, and Welfare”

Abstract

Click to increase image sizeClick to decrease image size Notes1 Figure 1 is available online at: https://insurance.ohio.gov/wps/wcm/connect/gov/ea3f5cf0-181b-47ed-bdbd-a060b6613a4d/CompleteAutoGuide+2022.pdf?MOD=AJPERES&CONVERT_TO=url&CACHEID=ROOTWORKSPACE.Z18_M1HGGIK0N0JO00QO9DDDDM3000-ea3f5cf0-181b-47ed-bdbd-a060b6613a4d-n.SMM7v. I don’t know the state from which the authors’ data are collected, and the format of insurance quotes in the author’s data may differ from that shown here; this is meant for illustrative purposes only.2 See https://www.bankrate.com/insurance/car/car-insurance-deductible//#types. Accessed on January 5, 2023; current version was updated March 2, 2023.3 See https://www.forbes.com/advisor/car-insurance/comprehensive-vs-collision-auto-insurance/. Last accessed on March 26, 2023.4 According to Statista, roughly 85% of new cars (and 40% of used cars) are financed. The number of new cars that are leased has been falling in recent years from a high of almost 1 in 3 in 2020 to roughly 1 in 5 today.5 See https://www.forbes.com/advisor/car-insurance/comprehensive-vs-collision-auto-insurance/. Last accessed on March 26, 2023.6 See https://www.bankrate.com/insurance/car/car-insurance-deductible//#types. Accessed on March 26, 2023.7 It’s important to recognize that we need ex-ante estimates of claim amounts, analogous to claim probabilities.8 See https://www.moneygeek.com/insurance/auto/do-i-need-comprehensive-collision/. Accessed on March 26, 2023.9 See https://www.bankrate.com/insurance/car/car-insurance-deductible//#impact. Accessed on March 26, 2023.