AN EMPIRICAL-INVESTIGATION OF THE STRUCTURE AND PERFORMANCE OF THE PRIVATE WORKERS COMPENSATION MARKET

Although a number of studies have focused on the relationship between market characteristics and market performance for the automobile insurance industry, surprisingly little attention has been devoted to the same type of analysis for workers' compensation insurance despite its being the leading commercial line. This study attempts to fill that gap through an empirical investigation of the structure and performance of the private workers' compensation market using panel data composed of state-years for the period 1980-1987. Two principal hypotheses that relate structure and performance were investigated: the collusion hypothesis and the differential efficiency hypothesis. Neither hypothesis could be fully supported from these results.