Advanced Search
MyIDEAS: Login to save this article or follow this journal

An Increase in Background Risk and Demand for Loss Reduction

Contents:

Author Info

  • Larry Y. Tzeng
  • Jen-Hung Wang
Registered author(s):

    Abstract

    This paper extends the research about the impact of an increase in background risk from cases with one decision variable to those with two decision variables. We apply the results of Eeckhoudt and Kimball (1992) to examine the comparative statics of an increase in background risk on demand for loss reduction that depends on market insurance and self-insurance together. We find that individuals with decreasing absolute risk aversion and decreasing absolute prudence demand more loss reduction in the face of an increase in background risk, although they may not demand more market insurance or self-insurance.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.insuranceissues.org/PDFs/252TW.pdf
    Download Restriction: no

    Bibliographic Info

    Article provided by Western Risk and Insurance Association in its journal Journal of Insurance Issues.

    Volume (Year): 25 (2002)
    Issue (Month): 2 ()
    Pages: 127-141

    as in new window
    Handle: RePEc:wri:journl:v:25:y:2002:i:2:p:127-141

    Contact details of provider:

    Related research

    Keywords:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Jiang, Chonghui & Ma, Yongkai & An, Yunbi, 2013. "International portfolio selection with exchange rate risk: A behavioural portfolio theory perspective," Journal of Banking & Finance, Elsevier, Elsevier, vol. 37(2), pages 648-659.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:wri:journl:v:25:y:2002:i:2:p:127-141. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (James Barrese).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.