Based on a unique data set of driving behavior we find direct evidence that private information has significant effects on contract choice and risk in automobile insurance. The number of car rides and the relative distance driven on weekends are significant risk factors. While the number of car...

A major shortcoming of the growing empirical work on asymmetric information is the inability to separately identify moral hazard from adverse selection. Abbring et. al. (2003) point out that dynamic insurance data can help here, by asking whether consumers have fewer claims when they are at a...