Multifactorial genetic disorders and adverse selection: Epidemiology meets economics

Angus Macdonald, Pradip Tapadar

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)


The focus of genetics is shifting its contribution to common, complex disorders. New genetic risk factors will be discovered, which if undisclosed may allow adverse selection. However, this should happen only if low-risk individuals would reduce their expected utility by insuring at the average price. We explore this boundary, focusing on critical illness insurance and heart attack risk. Adverse selection is, in many cases, impossible. Otherwise, it appears only for lower risk aversion and smaller insured losses, or if the genetic risk is implausibly high. We find no strong evidence that adverse selection from this source is a threat. © The Journal of Risk and Insurance, 2010.

Original languageEnglish
Pages (from-to)155-182
Number of pages28
JournalJournal of Risk and Insurance
Issue number1
Publication statusPublished - Mar 2010


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