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This study is the first effort by The Fraser
Institute to measure and compare the performance of auto
insurance markets across international jurisdictions. Previous
Institute studies have only compared Canadian provinces with each
other. However, this paper assesses the performance of automobile
insurance markets in 10 Canadian provinces, 50 American states,
and the United Kingdom in 2002 - the most recent year for which
complete data were available across all jurisdictions.
Data were collected on 15 variables describing the regulatory
policy environments and outcomes in each jurisdiction using
comparable measurement units. From these 15 variables, five
indices were constructed that comparatively measure market
quality and regulatory severity across international
jurisdictions. Two indices measure market quality outcomes from
the perspective of consumers regarding cost and choice; one index
gauges market quality outcomes from the perspective of insurers
regarding the business climate for auto insurance; a fourth index
measures the regulatory severity of auto insurance policy in each
market; and the fifth index measures overall market quality
combining the scores for each jurisdiction across all 15
variables. This study also examines statistical correlations
between variables that can be conceptually separated into
distinctly dependent and independent categories.
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