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The Impact of Public Insurance on Private Insurance Demand

Author

Listed:
  • Okura Mahito

    (Faculty of Economics, Nagasaki University, 4-2-1 Katafuchi, Nagasaki 850-8506, Japan)

Abstract

The purpose of this study is to investigate whether private insurance is a normal good by examining the effects of public insurance. Also, this study investigates how the amount of public insurance premium affects to the private insurance demand. The main results of this study are as follows. First, the private insurance has a tendency to be a normal good whether the public insurance benefit is fixed to household income. Second, the degree of loading of public insurance and average probability of accident taking place, which are the components of public insurance premium, relates to the private insurance demand, but whether this relation is positive or negative is indeterminate unless private insurance is actuarially fair.

Suggested Citation

  • Okura Mahito, 2015. "The Impact of Public Insurance on Private Insurance Demand," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 9(1), pages 35-45, January.
    • Handle: RePEc:bpj:apjrin:v:9:y:2015:i:1:p:35-45:n:5
    DOI: 10.1515/apjri-2014-0021
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    References listed on IDEAS

    as
    1. Arthur Hau, 2008. "When Is a Coinsurance‐Type Insurance Policy Inferior or Even Giffen?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 75(2), pages 343-364, June.
    2. Laurel C. Austin & Baruch Fischhoff, 2010. "Consumers' collision insurance decisions: a mental models approach to theory evaluation," Journal of Risk Research, Taylor & Francis Journals, vol. 13(7), pages 895-911, October.
    Full references (including those not matched with items on IDEAS)

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