Paul Thistle

• Professor at University of Toronto

On‐demand insurance is an innovative business model from the InsurTech space, which provides coverage for episodic risks. It makes use of a simple fact in a practical way: People differ in their frequency of exposure as well as the probability of loss. The extra dimension of heterogeneity can be used to screen the insured and shifts the utility‐pos...

Key Messages Evidence suggests the demographic age structure of sub-Saharan Africa is the leading factor of the low morbidity and mortality of COVID-19 compared to other regions of the world. Widespread social mitigation strategies, such as lockdowns, have resulted in severe economic and societal consequences in terms of food security, adolescent p...

We examine public policy toward the use of genetic tests by insurers when a positive test makes actuarially fair insurance too expensive for some consumers. With state-dependent utility, consumers may decline actuarially fair insurance if the probability of becoming ill exceeds a threshold. In markets with adverse selection, a positive genetic test...

PURPOSE High-risk human papillomaviruses (hrHPV) are the primary cause of cervical cancer. Human papillomavirus (HPV) vaccination is expected to prevent cervical cancers caused by the HPV types included in vaccines and possibly by cross-protection from other types. This study sought to determine the hrHPV type distribution in women at a rural Zimba...

Background: Vesicouterine fistulas are the rarest of all urogenital fistulas, with most cases occurring after Caesarean section. Case: A 38-year-old woman in rural Zimbabwe presented at 20 weeks gestation with a suspected fetus in the urinary bladder by transabdominal ultrasonography. This finding was confirmed intraoperatively together with a v...

Informed by a search of the literature about the usage of genetic testing information (GTI) by insurance companies, this paper presents a practical ethical analysis of several distinct public policy options that might be used to govern or constrain GTI usage by insurance providers. As medical research advances and the extension to the Human Genome...

We analyze the effect of ambiguous loss probabilities on competitive insurance markets with asymmetric information. We characterize equilibria under actuarially fair pricing with preferences that are second-order ambiguity averse (have smooth indifference curves). We also show existence of uniqueness of the second-best contracts and provide a chara...

We show that if losses are larger than wealth, then individuals with the option of declaring bankruptcy will not insure if the loss probability is above a threshold. In an insurance market with adverse selection, if the high risks’ loss probability is above the threshold, then no trade occurs at the Rothschild–Stiglitz equilibrium. Active trade in...

Background: People living with HIV treated with antiretroviral therapy (ART) are now living longer and thus many are requiring surgical procedures. For healthcare resource planning, it would be helpful to better understand the prevalence of HIV in surgical patients, the types of surgery HIV-positive patients are undergoing and whether HIV status im...

We analyze whether allowing the choice between full tort and limited tort coverage can serve as a screening mechanism in automobile insurance markets with asymmetric information. We show that limited tort policies create an externality on the market. Using a model of price competition where menus of contracts can be offered, and drivers choose thei...

We examine public policy toward the use of genetic information by insurers. Individuals engage in unobservable primary prevention and have access to different prevention technologies. Thus, insurance markets are affected by moral hazard and adverse selection. Individuals can choose to take a genetic test to acquire information about their preventio...

Background: Human papillomavirus (HPV) vaccines are a critical strategy in the prevention of cervical cancer, especially in countries like Zimbabwe where cervical cancer screening rates are low. In Zimbabwe, cervical cancer is the leading cause of cancer-related deaths in women but the HPV vaccine is not yet widely available. This study examined h...

Background: Previous studies to estimate burden of neurological disorders in Africa are limited to inpatients in urban hospitals. The spectrum of neurological conditions in rural Africa remains unclear. Objective: To determine the spectrum of neurological presentations in an outpatient setting in rural Zimbabwe. Methods: Clinical data was coll...

Background Previous studies to estimate burden of neurological disorders in Africa are limited to inpatients in urban hospitals. The spectrum of neurological conditions in rural Africa remains unclear. Objective To determine the spectrum of neurological presentations in an outpatient setting in rural Zimbabwe. Methods Clinical data was collected...

We introduce a model of the decision between precaution and insurance under an ambiguous probability of loss and employ a novel experimental design to test its predictions. Our experimental results show that the likelihood of insurance purchase increases with ambiguous increases in the probability of loss. When insurance is unavailable, individuals...

Zimbabwe underwent a socioeconomic crisis and resultant increase in food insecurity in 2008-9. The impact of the crisis on Tuberculosis (TB) incidence is unknown. Prospective databases from two mission hospitals, which were geographically widely separated, and remained open during the crisis, were reviewed. At the Howard Hospital (HH) in northern Z...

Luck, skill and labor markets all have empirical support as determinants of managerial compensation. We examine the relative importance of pay for luck, managerial skill and labor market opportunities in determining compensation. We measure luck as the predictable component of firm performance, measure skill using managerial fixed effects and measu...

The main purpose of this paper is using a unique data set from IPO filings to study the IPO market as a screening device and the going public decision. We find that private firms that are less likely to have the option to access public equity markets receive 54 cents for each dollar they expected to raise in an IPO, whereas firms that are more like...

The purpose of this study is to evaluate the effectiveness of highly active antiretroviral therapy (HAART) in preventing mother-to-child transmission (PMTCT) of HIV in breastfeeding women in rural Zimbabwe. During a severe socio-economic crisis in 2005-2007, 82 eligible HIV-positive pregnant women between 14-36 weeks gestation were initiated on HAA...

Empirical studies at the individual level (event studies) and those using more general measures of information and/or aggregate price movements often yield somewhat conflicting results regarding the relative importance of public information. Employing a more focused methodology that begins with no prior limitations on the number and types of public...

Most ISP supervisors are aware they possess legal rights to monitor employees' Internet use. Laws such as the federal Electronic Communications Protection Act generally allow employer's great leeway to monitor employees' computer use. Yet few ISP supervisors are aware that some courts are in the process of creating a legal duty for employers to mon...

We examine the incentives to obtain information about risk under strict liability and negligence rules when insurance is available. Information helps reduce the expected cost of accidents, but also exposes the potential injurer to classification risk. As a result, the social value of information may be negative. Under both strict liability and negl...

This chapter begins with a discussion of the English common law, the basis for much of American law today, and its evolving role in regulating the cyberworld. The common law, based on case precedents, has proven to be very adept at resolving new and difficult problems, at times more quickly and competently than legislation. This same mechanism is b...

Most employers are aware of their legal right to monitor employees' computer activities, and they are increasingly doing so. Yet, few of those who do monitor are aware that exercising this right may impose a legal duty to monitor prudently in order to protect third parties and to report criminal activity to the appropriate authorities. This paper b...

We examine CEOs' risk of termination, its determinants and its effect on firm value. Using survival analysis, we find that the risk of termination increases for about thirteen years before decreasing slightly with CEO tenure; 82% of CEOs have tenure of less than thirteen years. We also find that tenure increases with performance and compensation an...

We show that, under the reasonable person negligence rule, heterogeneity of potential injurers can be sufficient to create a demand for liability insurance. Potential injurers with a low probability of accidents or a high cost of exercising care have optimal levels of care that are below the negligence standard. For these groups, it may be less cos...

The analysis considers an insurance market with adverse selection where individuals' loss distributions may differ with respect to both the frequency and severity of loss. We show that the combination of deductibles and coinsurance can be used to sort rationed policyholders. Because of their screening properties, coinsurance and deductibles may bot...

We examine the effect of background risk on competitive insurance markets with moral hazard. If policy-holders have non-negative prudence, then background risk does not decrease effort and, when effort increases, expands the set of feasible policies. However, the effect of background risk on equilibrium is indeterminate. We analyse the choice betwe...

The English common law legal system has been applied to protect Internet users from a variety of threats and intrusions. The law succeeded and thrived for over 900 years due to its functional and adaptive nature. The common law that uniquely solves several Internet problems came into being as a system to manage a threatening adversary in a new and...

We examine a market with observably heterogeneous risks and a government sponsored guaranty fund and consider whether it is optimal to form a single insurer or separate insurers for each consumer type. Given the economic environment, pooling never dominates the formation of separate insurance companies. This result provides an incentive for the phe...

Although the incidence of AIDS continues to increase in Zimbabwe, no systematic investigation has been done of the contextual (behavioural and situational) variables important to the tailoring of AIDS educational prevention programmes for those at risk. As part of a World Health Organization-recommended cotrimoxazole prophylaxis programme to 1146 H...

The purpose of this audit was to review treatment outcomes of participants in the Cooperazione e sviluppo/Cooperation and Development (CESVI), Therapeutic Feeding Programme (TFP) (i.e., death vs cure vs absconded) and to make recommendations for improving this and other similar programmes. This study was a retrospective chart review. The charts of...

For over 60 years, Lerner's (1944) probabilistic approach to the welfare evaluation of income distributions has aroused controversy. Lerner's famous theorem is that, under ignorance regarding who has which utility function, the optimal distribution of income is completely equal. However, Lerner's probabilistic approach can only be applied to compar...

This paper considers whether lack of information regarding risk exposures can lead to a demand for negligence liability insurance. We find that, under the uniform negligence rule, any demand for liability insurance must come from informed individuals. The group whose privately optimal level of care is below the negligence standard may find it less...

We examined the outcomes of a World Health Organization (WHO) recommended programme offering cotrimoxazole (CTM) prophylaxis to 908 HIV-positive individuals in rural Zimbabwe, who accepted enrolment in the treatment programme. Outcomes included duration in programme, time between visits, relationship and marital status. Mean duration of participati...

Regarding single-family residential properties purchased for investment (non-owner occupied) we examine whether out-of-state buyers pay more than in-state buyers. We focus on the effects of search costs and anchoring. We use data on 2,828 Las Vegas non-owner occupied (investor) residences, 40 percent of which are purchased by non-local investors. W...

A single dose of nevirapine (sdNVP) administered to both mother and infant can decrease mother-to-child transmission of human immunodeficiency virus (HIV) by 47%, compared with ultra-short course zidovudine therapy (usZDV). There is limited data about the benefit of usZDV added to sdNVP to prevent mother-to-child transmission. We performed a double...

We use a model based on the 1991–2001 American Housing Survey to determine whether differences in mortgage rates among whites, blacks, and Hispanics are due to differences in the property and loan characteristics of the borrowers themselves or to racial differences in how those characteristics are priced into rates. We separate loans into major mar...

The size distribution of mutual property-liability insurers has a larger proportion of relatively small companies than the size distribution of stock property-liability insurers. Small mutuals are unlikely to offer risk-sharing advantages over conventional insurance, so these firms must offer their members other advantages. This article develops a...

This prospective cohort study of 257 rural Zimbabwean women was designed to compare patient satisfaction with levonorgestrel subdermal implants (Norplant and reg;) versus tubal ligation (TL) as a method of long-term contraception. Women were equally satisfied with both methods. At 1 year, 96% of Norplant users and 97% of the TL group reported being...

To assess the practicality and effectiveness of an Ultra-Short zidovudine regimen for prevention of perinatal HIV transmission in rural Zimbabwe. Double-blinded placebo-controlled randomized clinical trial. The Salvation Army Howard Hospital, a district hospital in rural Zimbabwe. 222 HIV positive pregnant women presenting for antenatal care prior...

Some participants in income and labor market surveys fail to report their earnings. We use data on imputed and reported wages for the same workers, taken from the 1988 change in the CPS processing system to compare actual earnings to both hot-deck and earnings-equations imputations. Our results indicate that failure to correct for nonparticipation...

A retrospective chart review of 177 women with one or more previous cesarean section over a 2-year period was carried out at The Salvation Army Howard Hospital in Glendale Zimbabwe. The vaginal birth after cesarean section rate (VBAC) was 66.1%. For patients who were offered a trial of labor (88.7%) the success rate of VBAC was 74.5%. There were no...

The objective of this paper is to compare alternative models of insurance pricing as theories of the property‐liability underwriting cycle. The existing literature has focused on comparing two models, the financial pricing and capacity constraint models. However, these are not the only relevant models. We show that six alternative models imply the...

The objective of this paper is to compare alternative models of insurance pricing as theories of the property-liability underwriting cycle. The existing literature has focused on comparing two models, the financial pricing and capacity constraint models. However, these are not the only relevant models. We show that six alternative models imply the...

The set of distribution functions that maximize expected utility for some utility function in a given class is the optimal set. This paper presents an algorithm for determining the optimal set of distributions for an important class of preferences and general finite sets of alternatives. The class of preferences considered, which includes the commo...

Abdominal pregnancy is a rare condition with a high maternal and perinatal morbidity and mortality. The incidence appears to be increasing in accord with the increase in incidence of ectopic pregnancy(1). Difficulties in diagnosis, delays in management and intraoperative complications such as haemorrhage challenge the skills of the most experienced...

The presence of an underwriting profit cycle in property/liability insurance has become a stylized fact. Models of this "underwriting cycle" imply that the insurance market is governed by two regimes, as capacity is constrained or not. We apply the smooth transition regression model to insurance industry data for 1934-93 to test for a regime shift....

discussion or comments on an earlier version of the paper. The authors are responsible for any errors or omissions. 1 Mitigating Earnings Imputation Bias: Evidence from the CPS Some participants in income and labor market surveys fail to report their earnings. If the procedure used to impute missing earnings is biased, then imputation bias is subst...

A number of studies have used the Capital Asset Pricing Model (CAPM) to integrate product market and financial theories of the firm. We reexamine the relationship between product market structure and systematic risk at the firm and industry level. We show that theory yields no testable implications at the firm level. We show, however, that there is...

Acquired immunodeficiency syndrome (AIDS) has become a global catastrophe. In sub-Saharan Africa, it is primarily a heterosexual disease. The human immunodeficiency virus (HTV-1) infects 20.8 million adults and children. Seven to forty-five percent of HIV-positive African mothers will transmit the infection to their babies, the risk increasing with...

This paper shows that, if the performance of the economy is independent of the identities of individuals, then many welfare criteria yield sets of optimal social states that are equal to the Pareto optimal set. This result is proved for income distributions and extended to more general social choice problems. If the independence condition holds, th...

Recent increases in earnings inequality have been described as "enormous." Is it that we are experiencing a unique shift toward greater inequality or are we returning to a more normal state of affairs for the American economy? The recent availability of six decades of data together with important new developments in the theory and measurement of in...

To review cervical cancer screening since its introduction to a rural district hospital in Zimbabwe. Retrospective, descriptive. Rural district hospital. Data from 419 cervical smears performed on women who had cervical cancer screening as part of a routine post partum visit from 1994 to 1996 was available for analysis. Rates of abnormal cervical s...

Models of adverse selection assume that risk type is known to the consumer but not to the insurer. Many analyses suggest that information has zero social value and negative prior value. Why then would consumers become informed? What is the incentive to gather information and why does adverse selection arise? We show that the private value of inform...

This study considers a single-period monopolistic insurance market with adverse selection and moral hazard. We find that, where the distortions introduced by moral hazard are sufficiently moderate, the insurer can use price-quantity contracts as a mechanism to simultaneously deal with both information asymmetries. When no information regarding type...

Standard models of adverse selection in insurance markets assume policyholders know their loss distributions. This study examines the nature of equilibrium and the equilibrium value of information in competitive insurance markets where consumers lack complete information regarding their loss probabilities. We show that additional private informatio...

This paper investigates the extent to which political factors, which vary across state Public Utility Commissions, affect electric utility bond ratings. The paper focuses on the effects of the commissioner selection method (election or appointment) and other politically determined variables on bond ratings of privately owned and regulated electric...

The detection of unbiased abnormal returns in the classic event study depends on the validity of the assumption that the parameters of the return generating process remain constant throughout the sample period. However, given the substantial amount of evidence to support the fact that the market model parameters are not stable over time, previous r...

Regional income distributions are analyzed and tested for convergence and divergence in the 1970s. The methodology is the same as that recently used to show the almost complete convergence of the South and non-South. This paper disaggregates the non-South into major regions consisting of the West, Midwest, and Northeast. Tests for rank dominance re...

ARSTRACT Two general welfare criteria, mean‐relative Lorenz and mean‐absolute Lorenz dominance, induce partial orders on income distributions. We propose asymptotically distribution‐free inference procedures, based on the union‐intersection principle, for these two welfare criteria. Unlike classical tests, our procedures allow one to distinguish am...

This paper considers the conditions under which it is possible to achieve consensus on the welfare and inequality rankings of income distributions. For income distributions with equal means, any degree of stochastic dominance implies that Atkinson inequality indices are ordered; with unequal means the Atkinson welfare indices are ordered. This impl...

This paper investigates interstate variation in income inequality. By avoiding inequality indices and focusing directly on the Lorenz curve, the authors provide a more general explanation of the differences in inequality. They find that mean family income, the standard deviation of years of schooling, per capita educational expenditure, and propert...

The fairness of a tax change is often judged by examining its impact on tax burdens or net incomes of different income classes. Two competing definitions of tax neutrality give surprisingly different and conflicting answers to the fairness question. If the objective is to maximize welfare, the Lorenz dominance principle offers guidance as to how ta...

The rank dominance criterion for comparing income distributions assumes the Pareto principle, anonymity, and population size invariance. This paper applies rank dominance to compare international income distributions. Empirically, rank dominance is a powerful tool for ordering income distributions. Our results suggest that much of the power of gene...

The time consistent redistributive linear income tax rule is derived and it is shown that the results obtained in a static model only generally hold for the last period of the government's planning horizon. The tax policy earlier in the horizon also has to be chosen to affect capital accumulation favorably and, hence, improve the tax base and welfa...

Contrary to their claim, Naughton and Frantz fail to disprove the fundamental difference in the social costs of rent-seeking and X-inefficiency identified in our paper. Nor have they shown that our measure of the social costs is incorrect. What they have done is introduce, in an ex post fashion, fixed costs for X-inefficiency. But they fail to prov...

Privatization, the removal of regulatory control and similar changes in property rights within firms can be expected to shift cost functions downward and permit increased output, lower final service prices and more efficient resource allocation The US Airline Deregulation Act of 1978 was clearly expected to have these effects. This paper investigat...

This paper examines the economic consequences of using excessive rates-of-return to detect and prosecute cartels. We find that this policy leads to inefficient factor utilization, but always increases output and welfare. The rate-of-return policy may yield greater social gains than a welfare-based antitrust policy.

The measurement of global tax progressivity has been extensively debated over the last decade. We find that the debate stems from a failure to fully recognize the role of the average tax burden. We demonstrate that, once the effect of the average tax burden is controlled for, the two major approaches to global progressivity measurement, which have...

We test empirically to determine if the relation between banks' portfolio of assets and liabilities and interest rate is stable. Several possible causes of instability are considered. The econometric techniques employed allow for continuous change in the structure of the empirical model. In all cases, stability of the model is strongly rejected. We...

This paper provides asymtotically distribution-free statistical inference procedures for generalized Lorenz curves. Given appropriate measures of income and the income recipient unit are chosen appropriately, the tests allow consensually valid statements regarding social welfare to be made from sample data on the basis of sound inferential procedur...

We propose statistical tests for comparing the absolute Lorenz curves introduced by Moyes (1987). These tests allow absolute inequality comparisons using the tools of statistical inference. We apply the tests to U.S. state income distributions, obtaining rankings in 96 percent of the comparisons.

The relationship between lower residual progression and ‘single-crossing’ conditions as necessary and sufficient conditions for one tax system to be conditionally more progressive or uniformly more progressive than another are clarified.

This paper investigates shifts in cost functions of monopoly and regulated firms operating under conditions of X-inefficiency and rent-seeking behavior. We show that X-inefficiency and rent seeking have significantly different implications for economic welfare. Distinctions are drawn between pecuniary and real X-inefficiency and between sunk and co...

This paper shows that using a one-parameter functional form for the Lorenz curve is equivalent to ranking income distributions based on their Gini indices. Irrespective of the underlying data, the fitted Lorenz curves can never intersect. Circu mstances in which one-parameter Lorenz curves can safely be specified are identified and their policy rel...

We develop a model of price competition between insurers where insurers maximize expected profit subject to a solvency constraint. Insurers base prices in part on expected losses, the estimates of which are updated in a Bayesian fashion. We assume that insurers are overconfident—they overestimate the precision of their private signal about expected...

Lilliard, Smith and Welch (1986) note the rising proportion of workers whose earnings go unreported in the Current Population Survey and argue that the Census Bureau's imputation procedure fails to account for the positive correlation between nonresponse and income. As a consequence, an imputation or reporting bias is substituted for the nonrespons...

Utilities in states with elected Public Utility Commissioners (PUC)'s may face a higher cost of capital. The objective of this project is to determine if the direct election of PUC's has any effect on electric utilities cost of capital. The first part of the project is an analysis of the overall cost of capital of electric utilities. We use a book-...

The objective of this project is to determine if the direct election of PUCs has any effect on electric utilities cost of capital. The research is carried out in two parts. The first part of the project is an analysis of the overall cost of capital of electric utilities. We use a book-value-weighted average of the costs of short and long term debt...

We examine the endogenous value of information in an insurance market where there is heterogeneity in prevention technology and adverse selection along the ef-ficiency dimension of prevention. Prior research on the value of information in ad-verse selection economies suggests that it has zero social value and negative private value leading consumer...