Law and the Demand for Property-Casualty Insurance Consumption
AbstractThis paper examines the importance of legal rights and enforcement in influencing property-casualty insurance consumption. We extend the existing literature by examining the role of legal factors in determining insurance density across countries. Also, measures of risk aversion, loss probability and price, which overcome limitations of proxies used in the existing literature on insurance demand are analysed. Using a panel data set we apply a Generalized Methods of Moments dynamic system estimator, which relaxes the assumption of strict exogeneity of the regressors and produces unbiased and efficient estimates. The results show a strong positive relationship between the protection of property rights and insurance consumption, which is robust to various model specifications and estimation techniques. Moreover, the results show the purchase of property-casualty insurance is significantly and positively related to loss probability and income, as well as providing weaker evidence of a negative relationship with price.
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Bibliographic InfoPaper provided by University of Adelaide, Centre for International Economic Studies in its series Centre for International Economic Studies Working Papers with number 2003-14.
Length: 36 pages
Date of creation: May 2003
Date of revision:
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- Mohammed, M.A. & Ortmann, Gerald F., 2005. "Factors influencing adoption of livestock insurance by commercial dairy farmers in three Zobatat of Eritrea," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 44(2), June.
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