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I think the distinction made on this page between moral hazard and morale hazard is a false one, and derives from a misunderstanding of the nature of moral hazard. Moral hazard does not imply any conscious or malicious intent, but can simply indicate an indifference to loss, as the Wikipedia article on moral hazard correctly states. The author of this page has not found any reputable economist using the term morale hazard, but merely refers to something called Rupp's Insurance & Risk Management Glossary, whose definition of moral hazard [1] is confusing and incorrect.-- RichardVeryard 14:09, 10 October 2006 (UTC)
Richard, here is what I posted on
Talk:Moral hazard, I don't know if you saw:
In insurance, at least, the two need to be distinguished. From "Property and Liability Insurance Principles", by Ludhard & Wiening (published by the AICPCU):
Moral hazards are conditions that may lead a person to intentionally cause or exaggerate a loss. The threat from moral hazard is the possibility that the insured may intentionally cause a loss or file a false claim. For example, an insured may intentionally cause a fire or an auto accident to collect a claim payment on a building or car and unjustly enrich himself or herself.
Attitudinal hazards, also known as morale hazards, involve carelessness, or indifference to, potential loss on the part of an insured or applicant. Such hazards are more subtle and thus more difficult to detect than are moral hazards. A particularly dangerous attitudinal hazard is an insured's attitude that "I don't need to be careful because I have insurance."
This is a huge problem in insurance, and they are two categories that are often distinguished in this industry - a moral hazard-induced loss could end an insured in prison!. Although they might be the same in economics, we can distinguish in the two articles that the terminology used in each field is quite different (and in fact, perhaps contradictory). Bellemichelle 20:18, 2 November 2006 (UTC)
Hi again Richard. When you put it that way, does make sense to put it in one giant article together: Moral hazard, with subsections for "in Economics" generally, then "in Insurance", followed by an explanation of Morale hazard as used in Insurance and the importance of that distinction. Thanks and cheers!
Bellemichelle 18:01, 10 November 2006 (UTC)
All I can find is a simple misspelling of "moral", as well as a misunderstanding of the economic concept. I can see people in the insurance industry wanting to make the distinction discussed, but the defenders of this article need to prove that distinction is regularly discussed by credible sources using that term. I propose this article be deleted, and a comment inserted in the article on Moral hazard that "moral" has been misspelled "morale" but that that is incorrect. Bracton ( talk) 15:47, 3 February 2009 (UTC)
I don't think this article should exist because the concept of moral hazard has changed by economists arguing that the insurance industry's understanding of risk and risk sharing is something that Arrow apparently dislikes, and so he used an old insurance company term to discredit insurance. A quick google returns this link to http://books.google.com/books?id=FnCqD7Xfsz8C&pg=PA388&lpg=PA388&dq=history+moral+hazard+insurance+1600&source=bl&ots=EMJ0aY0d10&sig=MNUBESqQIYUHHnXVotx8vThi_-A&hl=en&ei=H6iBSs6tHNGptgfL_6nFCg&sa=X&oi=book_result&ct=result&resnum=13, the title being The "Economic History of Britain Since 1700: 1860-1939 - Google Books Result": "'Moral hazard' has to do with taking advantage of knowledge, ... of corn which he knows is going to fail (supposing the insurance company does not know)." You are not allowed to insure a loss for which you have no risk because of moral hazard - I can't buy life insurance on you, because my motivation is to kill you, or I know you will be killed and I'm going to profit from your death without incurring any risk.
So, should this article be deleted or the attempt to provide an original meaning to moral hazard by adding an e and still getting it wrong be merged into moral hazard, which also gets the original meaning wrong? Mulp ( talk) 17:30, 11 August 2009 (UTC)
Insurance can be seen as discouraging preventive measures, such as proper fire prevention. For example, the expectation of federal government disaster aid seems to encourage the residents of Malibu, California to let bushes and trees grow near their houses, as part of their landscaping. This increased vegetation raises the risk of fire damage to their houses.
I've not considered this article's other assertions, but this one seems highly implausible to me. I'd like some evidence of this encouragement acted upon with this expectation, or an argument that it is (credible) common knowledge that it is done. Did they clearcut their property before somehow coming under the sway of this expectation?
Alternatively, if the intent is a rhetorical construction, I'd like to see language that explicitly construes, e.g., 'Insofar as the expectation of federal government disaster aid might seem to encourage the residents of Malibu, California to disregard the risks of landscaping with bushes and trees near their houses, that would seem to be an example of morale hazard. But the whole idea of construing it begs the question, should the article pick on Malibu?
-SM 03:41, 4 December 2009 (UTC)
Should there be some sort of disambiguation. As noted here, in insurance theory there is a difference between "Morale Hazard" and "Moral Hazard." However, the definition of "Moral Hazard" given differs from the definition of "Moral Hazard" in economics. The reference given ("Analyzing Hazards" Ludhardt, C. M. & Wiening, E. A. (2005) Property and Liability Insurance Principles, 4th edition) confirms that in insurance theory, "Morale Hazard" occurs when the insured party becomes indifferent to loss and "Moral Hazard" occurs when people misrepresent themselves to insurance companies.
On the other hand, a source like "Advanced Microeconomic Theory (3rd Edition) by Jehle and Reny" confirms that in economic theory, Kenneth Arrow's concept of "Moral Hazard" occurs when the insured party becomes indifferent to loss. The term "Moral Hazard" as used in insurance theory is perhaps slightly related to the concept of "adverse selection" in economic theory, but only slightly.
Perhaps there should be a disambiguation page to distinguish the two and a note made in each page that differing definitions exist depending on the subject.
-- Blossomonte ( talk) 23:36, 30 May 2014 (UTC)
This article was nominated for deletion on 10 December 2016. The result of the discussion was redirect to Moral Hazard. |
This redirect does not require a rating on Wikipedia's
content assessment scale. It is of interest to the following WikiProjects: | |||||||||||
|
I think the distinction made on this page between moral hazard and morale hazard is a false one, and derives from a misunderstanding of the nature of moral hazard. Moral hazard does not imply any conscious or malicious intent, but can simply indicate an indifference to loss, as the Wikipedia article on moral hazard correctly states. The author of this page has not found any reputable economist using the term morale hazard, but merely refers to something called Rupp's Insurance & Risk Management Glossary, whose definition of moral hazard [1] is confusing and incorrect.-- RichardVeryard 14:09, 10 October 2006 (UTC)
Richard, here is what I posted on
Talk:Moral hazard, I don't know if you saw:
In insurance, at least, the two need to be distinguished. From "Property and Liability Insurance Principles", by Ludhard & Wiening (published by the AICPCU):
Moral hazards are conditions that may lead a person to intentionally cause or exaggerate a loss. The threat from moral hazard is the possibility that the insured may intentionally cause a loss or file a false claim. For example, an insured may intentionally cause a fire or an auto accident to collect a claim payment on a building or car and unjustly enrich himself or herself.
Attitudinal hazards, also known as morale hazards, involve carelessness, or indifference to, potential loss on the part of an insured or applicant. Such hazards are more subtle and thus more difficult to detect than are moral hazards. A particularly dangerous attitudinal hazard is an insured's attitude that "I don't need to be careful because I have insurance."
This is a huge problem in insurance, and they are two categories that are often distinguished in this industry - a moral hazard-induced loss could end an insured in prison!. Although they might be the same in economics, we can distinguish in the two articles that the terminology used in each field is quite different (and in fact, perhaps contradictory). Bellemichelle 20:18, 2 November 2006 (UTC)
Hi again Richard. When you put it that way, does make sense to put it in one giant article together: Moral hazard, with subsections for "in Economics" generally, then "in Insurance", followed by an explanation of Morale hazard as used in Insurance and the importance of that distinction. Thanks and cheers!
Bellemichelle 18:01, 10 November 2006 (UTC)
All I can find is a simple misspelling of "moral", as well as a misunderstanding of the economic concept. I can see people in the insurance industry wanting to make the distinction discussed, but the defenders of this article need to prove that distinction is regularly discussed by credible sources using that term. I propose this article be deleted, and a comment inserted in the article on Moral hazard that "moral" has been misspelled "morale" but that that is incorrect. Bracton ( talk) 15:47, 3 February 2009 (UTC)
I don't think this article should exist because the concept of moral hazard has changed by economists arguing that the insurance industry's understanding of risk and risk sharing is something that Arrow apparently dislikes, and so he used an old insurance company term to discredit insurance. A quick google returns this link to http://books.google.com/books?id=FnCqD7Xfsz8C&pg=PA388&lpg=PA388&dq=history+moral+hazard+insurance+1600&source=bl&ots=EMJ0aY0d10&sig=MNUBESqQIYUHHnXVotx8vThi_-A&hl=en&ei=H6iBSs6tHNGptgfL_6nFCg&sa=X&oi=book_result&ct=result&resnum=13, the title being The "Economic History of Britain Since 1700: 1860-1939 - Google Books Result": "'Moral hazard' has to do with taking advantage of knowledge, ... of corn which he knows is going to fail (supposing the insurance company does not know)." You are not allowed to insure a loss for which you have no risk because of moral hazard - I can't buy life insurance on you, because my motivation is to kill you, or I know you will be killed and I'm going to profit from your death without incurring any risk.
So, should this article be deleted or the attempt to provide an original meaning to moral hazard by adding an e and still getting it wrong be merged into moral hazard, which also gets the original meaning wrong? Mulp ( talk) 17:30, 11 August 2009 (UTC)
Insurance can be seen as discouraging preventive measures, such as proper fire prevention. For example, the expectation of federal government disaster aid seems to encourage the residents of Malibu, California to let bushes and trees grow near their houses, as part of their landscaping. This increased vegetation raises the risk of fire damage to their houses.
I've not considered this article's other assertions, but this one seems highly implausible to me. I'd like some evidence of this encouragement acted upon with this expectation, or an argument that it is (credible) common knowledge that it is done. Did they clearcut their property before somehow coming under the sway of this expectation?
Alternatively, if the intent is a rhetorical construction, I'd like to see language that explicitly construes, e.g., 'Insofar as the expectation of federal government disaster aid might seem to encourage the residents of Malibu, California to disregard the risks of landscaping with bushes and trees near their houses, that would seem to be an example of morale hazard. But the whole idea of construing it begs the question, should the article pick on Malibu?
-SM 03:41, 4 December 2009 (UTC)
Should there be some sort of disambiguation. As noted here, in insurance theory there is a difference between "Morale Hazard" and "Moral Hazard." However, the definition of "Moral Hazard" given differs from the definition of "Moral Hazard" in economics. The reference given ("Analyzing Hazards" Ludhardt, C. M. & Wiening, E. A. (2005) Property and Liability Insurance Principles, 4th edition) confirms that in insurance theory, "Morale Hazard" occurs when the insured party becomes indifferent to loss and "Moral Hazard" occurs when people misrepresent themselves to insurance companies.
On the other hand, a source like "Advanced Microeconomic Theory (3rd Edition) by Jehle and Reny" confirms that in economic theory, Kenneth Arrow's concept of "Moral Hazard" occurs when the insured party becomes indifferent to loss. The term "Moral Hazard" as used in insurance theory is perhaps slightly related to the concept of "adverse selection" in economic theory, but only slightly.
Perhaps there should be a disambiguation page to distinguish the two and a note made in each page that differing definitions exist depending on the subject.
-- Blossomonte ( talk) 23:36, 30 May 2014 (UTC)