Political interests cause inefficiencies in insurance
Freakonomics Radio highlights research by UC professor
Research by a University of Cincinnati professor illustrates how insurance markets are broken, Massachusetts Institute of Technology economist Amy Finkelstein said during a Freakonomics Radio Book Club discussion.
Eunjee Kwon, PhD, an assistant professor in real estate at the University of Cincinnati's Carl H. Lindner College of Business, studied the unintended consequences of post-disaster policies and reported the findings in a paper she co-authored.
Eunjee Kwon, PhD, assistant professor in real estate at the University of Cincinnati's Carl H. Lindner College of Business
During election seasons, areas that are affected by natural disasters such as hurricanes receive extra government funding because politicians want to show they're helping people, the research found. That extra funding attracts more people to those rebuilding regions, which puts more people in potentially hazardous areas.
“The paper highlights that the distorted movement of people result in GDP (gross domestic product) and productivity losses,” Kwon said. “Moreover, the politically-driven aid could potentially dissuade people from purchasing insurance coverage since they expect the government to provide assistance following disasters.”
Finkelstein is the co-author of a new book called “Risky Business: Why Insurance Markets Fail and What to Do About It.” Referencing the work of Kwon and her colleagues, Finkelstein said the same issues occur in health care with policies and regulations that dissuade people from purchasing better health insurance.
“We all know that many policies are influenced by political interests, but we don't yet know how much inefficiency these electoral motives have caused,” Kwon said. “Our work challenges the structure of public policies that have strong political connections.”
Featured image at top: Hurricane Irma aftermath. Photo by Wade Austin Ellis on Unsplash
Innovation Lives Here
The University of Cincinnati is leading public urban universities into a new era of innovation and impact. Our faculty, staff and students are saving lives, changing outcomes and bending the future in our city's direction. Next Lives Here.
Related Stories
Political interests cause inefficiencies in insurance
March 31, 2023
Research by a University of Cincinnati professor illustrates how insurance markets are broken, Massachusetts Institute of Technology economist Amy Finkelstein said during a Freakonomics Radio Book Club discussion.
The benefits and downsides for 'forever renters'
May 29, 2024
A growing number of people expect to rent their entire lives instead of buying a home, which presents potential benefits and downsides for these “forever renters,” University of Cincinnati professors told Business Insider.
Weekly Real Estate News: UC welcomes new academic director of real estate program
June 8, 2023
Gary Painter, PhD, the new academic director of the real estate program within the University of Cincinnati’s Carl H. Lindner College of Business, is looking forward to making connections in the university community and beyond, he told Weekly Real Estate News.
Cincinnati Business Courier: Gary Painter named academic director of real estate program
June 1, 2023
Gary Painter, PhD, is joining the Carl H. Lindner College of Business as the real estate program’s new academic director.
Lindner real estate professor weighs in on affordable housing
August 8, 2023
A recent opinion piece in the Los Angeles Times examined differing viewpoints and data around affordable housing in the publication’s namesake city. The author tapped Gary Painter, PhD, professor of real estate, and an expert and longtime researcher in social innovation, housing, urban economics and education policy, to offer insight.
Newsday: Lindner professor weighs in on state-level affordable housing policies
September 19, 2023
As New York Gov. Kathy Hochul announced a new initiative to explore state-level policies for combating the affordable housing crisis, Carl H. Lindner College of Business real estate professor Gary Painter, PhD, offered insight to Newsday on the impact of such programs.
Residents concerned about high concentration of low-income housing
May 16, 2024
Efforts to build more affordable housing in Cincinnati have created concerns for residents as low-income housing has been concentrated in some of the city’s poorest neighborhoods, WCPO reported. Gary Painter, PhD, the academic director of the University of Cincinnati’s Carl H. Lindner College of Business real estate program and a professor of real estate, said a complaint against the city could lead to positive outcomes.
Built-to-rent home inventory increases in Cincinnati region
May 22, 2024
Options are increasing for people who want the benefits of living in a house without the need for a mortgage as the number of built-to-rent homes is increasing in the Cincinnati region, the Cincinnati Enquirer reported. Gary Painter, PhD, the academic director of the University of Cincinnati’s Carl H. Lindner College of Business real estate program and a professor of real estate, thinks concerns about the developments are misplaced.
This Old House: Ohio homes among the nation’s most affordable
February 22, 2024
Buying a house in Ohio requires a lower down payment than in almost any other state, This Old House found, but a University of Cincinnati professor said Ohio cities such as Cincinnati could see that affordability wane.
WCPO: Settlement could lead to lower home prices
March 18, 2024
It could become more affordable to buy a house, a University of Cincinnati professor told WCPO, after the National Association of Realtors reached a settlement that is expected to lower agent commissions.