Tallinn University of Technology

You are welcome to the Department of Economics and Finance research seminar "Explaining consumer inertia: Drivers of attention and choice in car insurance market".

The seminar will take place on the 22nd of May, from 16:00 to 17:00 in room SOC-413 and MS Teams platform (link).

Presenters: Kaido Kepp and Kadri Männasoo (Department of Economics and Finance, TalTech)

Paper title: Explaining consumer inertia: Drivers of attention and choice in car insurance market
Kaido Kepp joint work with Kadri Männasoo


We study the vehicle lessees’ Motor Own Damage insurance search frictions and choices. We use a consumer-level annual panel of policy and insurance offers’ data from 2010-2018 from the biggest insurance broker consolidating the Estonian car insurance market offers. We apply the two-stage discrete choice model by Hortaçsu et al 2017 that identifies the sources of consumer inertia by separating the attention and choice decisions given the observed switches to new providers. Our results show strong inertia that stems from consumer inattention and considerable heterogeneity of inattention across consumer groups. Consumers choose from a set of offers and their decisions to switch or stay with the current provider reveal substantial price elasticity and a modest effect of insurance provider’s brand preference.

The public research seminars of the Department of Economics and Finance (DEF) at Tallinn University of Technology  usually take place on the second and fourth Wednesdays of the month in online format, unless announced otherwise. The seminar will last one hour, presentation will last approximately 45 minutes followed by 15 minutes of discussion. The seminars are held in English. Questions about the seminar can be sent to the seminar coordinator Natalia Levenko: natalia.levenko@taltech.ee.