TY  - JOUR
PY  - 1993//
TI  - The Stochastic Dominance of No-Fault Automobile Insurance
JO  - Journal of Risk and Insurance
A1  - Cummins, J. David
A1  - Weiss, Mary A.
SP  - 230
EP  - 264
VL  - 60
IS  - 2
N2  - This article presents a rigorous analysis of no-fault automobile insurance in terms of stochastic dominance theory. In the baseline case, with identical drivers and actuarially fair insurance, no-fault is stochastically dominant as long as the no-fault insurance premium exceeds the tort premium. In this case, no-fault brings a higher proportion of accident costs under insurance, increasing driver welfare. When expense charges are introduced (actuarially unfair insurance) no-fault may still be stochastically dominant if the expense charge is less under no-fault, even if no-fault weakens incentives for good driving and leads to higher accident rates. Elective no-fault is unlikely to reduce auto insurance costs, because drivers with high propensities toward moral hazard are likely to retain their right to sue by choosing tort.<p /> 
LA  - 
SN  - 0022-4367
UR  - http://dx.doi.org/10.2307/252906
ID  - ref1
ER  -