Efficiency, Efficiency, Efficiency

The key concept of economics, efficiency is brought into sharp focus by a piece on the BBC website which looks at how big data is capable of improving the insurance market.

The article - How Big Data Is Changing the Cost of Insurance - gives a fascinating insight into how better information can improve the functioning of markets and hence increase efficiency, with mutual benefits for both the insurance companies and their customers. It also puts across the view that better data is necessarily more intrusive and thus might impinge upon an individual's privacy.

However, the underlying point is a fairly straightforward one: technology allows markets to go a long way towards resolving issues of 'moral hazard' and 'adverse selection' and if that is the case, then surely this is a good thing?

So a big thanks to him...