#44: Risky Business: Why Insurance Markets Fail and What to Do About It with Amy Finkelstein

Amy Finkelstein is the John & Jennie S. MacDonald Professor of Economics at the Massachusetts Institute of Technology. She is the co-founder and co-Scientific Director of J-PAL North America, a research center at MIT that encourages and facilitates randomized evaluations of important domestic policy issues.

She is also the founding Editor of American Economic Review: Insights and the co-Director of the Health Care Program at the National Bureau of Economic Research. She is a member of the National Academy of Sciences and of the Institute of Medicine, and a fellow of the American Academy of Arts and Sciences and of the Econometric Society.


I spoke with Amy about the book she co-authored with fellow economists Liran Einav and Ray Fisman titled: Risky Business: Why Insurance Markets Fail and What to Do About It.

Some of the topics we discussed includes: 

•  Why 'selection' is integral when it comes to insurance
• Why doesn't divorce insurance exist?
•  The 'premiums of selection' being something not often discussed in free markets
• Can governments mandate against insurance selection problems? and what can it help to rectify?
• How customers are still able to know how much of a risk they are, contrary to the insurers knowledge
• Actions insurance companies take to try and attract  the customer they want.
• The other markets that are affected by selection and potential future projects.

The Book and Audiobook: Risky Business: Why Insurance Markets Fail and What to Do About It is out now.







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