The demand for insurance against loss from a particular risky asset is likely to depend on other risks the decision maker faces. For independently distributed other risks, referred to as background risk, Eeckhoudt and Kimball [1992] determine the effect on insurance demand of introducing background risk. Recently, Eeckhoudt, Gollier and Schlesinger [1996] determine conditions on preferences suc...

Physicians typically carry virtually complete malpractice insurance coverage. This contradicts standard theoretical predictions that under a negligence rule of liability there should be no demand for insurance, and insurance policies under moral hazard will contain co-payment provisions. It is argued that judicial 'errors' in defining negligence generate a demand for liability and legal defense...

BACKGROUND Estimations of the demand for healthcare often rely on estimating the conditional probabilities of being ill. Such estimate poses several problems due to sample selectivity problems and an under-reporting of the incidence of illness. This study examines the effects of health insurance on healthcare demand in Indonesia, using samples that are both unconditional and conditional on bein...

Two alternative interpretations of the demand for insurance can be derived from the basic insurance model: (1) insurance is a preference for certain losses over uncertain ones of the same expected magnitude, or (2) insurance is a demand for an income transfer if the bad state of the world occurs. Although the former represents convention, many empirical studies show that people actually prefer ...

In this paper, we provide micro-econometric evidence on the determinants of life insurance demand in China, the largest emerging market in the world. We employ the China Household Income Project (CHIP) dataset for the year 2002 in the analysis. The timing is ideal, because of the nature of the less well developed capital markets and social security systems in China in 2002, which sets a suitabl...

Voluntary health insurance schemes help those who are not included in social health insurance (1). These are divided into supplementary and selfemployed insurance. Generally, the supplementary health insurance provides health facilities in nongovernmental sectors for the insured, fills the gap in services and commitments of basic health insurance, (2) makes the room for innovation, diversity an...

We study the optimal insurance demand of a riskand ambiguity-averse consumer if contract nonperformance risk is perceived as ambiguous. We find that the consumer’s optimal insurance demand is lower compared to a situation without ambiguity and that his degree of ambiguity aversion is negatively associated with the optimal level of coverage. We also determine sufficient conditions for biased bel...

Most of the world’s poor face large risks, which affect their investment decisions and contribute to the perpetuation of poverty (Karlan et al. forthcoming). In this context, insurance products targeted at the poor are seen as having substantial promise, as opportunities both to make profit and to improve efficiency and social welfare. The marketing of insurance products to the poor has faced t...