The present paper investigates the adverse selection problem by examining the relationship between accident occurrences and deductible choice utilizing a seemingly unrelated probit model that allows for best controls for unobserved heterogeneity and endogeneity.While this microeconometric analysis does not consider a multivariate model and considers only two types of click here contracts, namely, those with high and low deductibles, it does suggest important implications from applying a recursive bivariate probit.We employ new cross-sectional data on a Tunisian insurance portfolio containing 31,125 policyholders.
The results support some evidence for residual adverse selection in the studied insurance portfolio.Moreover, the results suggest the presence of a wealth effect in the soiebiologique.com decision of the contract choice.