Description:

Speaker: Rosario Cisternas

Title: The Role of Limited Awareness and Targeted advertising in the Chilean Health Insurance Market

Abstract: This presentation examines how limited awareness and targeted advertising shape the effects of Chile's 2020 Single Table Factor (STF), which bans gender-based pricing and restricts age-based pricing in private health insurance. Using administrative data from the health regulator and a planned survey on search and choice frictions, I study how sales agents and market complexity influence which options consumers actually consider, allowing firms to circumvent regulation. I develop a structural model in which firms choose prices and whether to use a "marketing" technology—via complex plan design and sales effort—to steer consumers. Building on Agarwal and Somaini's identification framework for demand analysis under latent choice constraints, the analysis uses choice shifters and preference shifters on the demand side, together with inequality-based restrictions on firm behavior on the supply side, to evaluate the welfare effects of banning demographic pricing and potential market-simplification policies.