American Risk and Insurance Association — Founded in 1932

2021 Robert C. Witt Award

Daniel Gottlieb
Daniel Gottlieb
Olivia Mitchell
Olivia Mitchell

The recipients of the 2021 Witt Award were Daniel Gottlieb and Olivia Mitchell for “Narrow Framing and Long-Term Care Insurance,” December 2020, Volume 87, Issue 4, pages 861-893.

Abstract

We propose a model of narrow framing in insurance and test it using data from a new module we designed and fielded in the Health and Retirement Study. We show that respondents subject to narrow framing are substantially less likely to buy long-term care insurance than average. This effect is much larger than the effects of risk aversion or adverse selection, and it offers a new explanation for why people underinsure their later-life care needs.