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Uncertainty of Governmental Relief and the Crowding out of Insurance

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  • Paul A. Raschky

    ()

  • Reimund Schwarze

    ()

  • Manijeh Schwindt

    ()

  • Ferdinand Zahn

    ()

Abstract

This paper discusses the problem of crowding out of insurance by co-existing governmental relief programs - so-called 'charity hazard' - in a context of different institutional schemes of governmental relief in Austria and Germany. We test empirically whether an assured partial relief scheme (as in Austria) drives a stronger crowding out of private insurance than a scheme promising full relief which is subject to ad hoc political decision making (as in Germany). Our general finding is that the institutional design of governmental relief programs significantly affects the demand for private natural hazard insurance.

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Bibliographic Info

Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2010-03.

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Length: 36
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Handle: RePEc:inn:wpaper:2010-03

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Keywords: Insurance demand; governmental relief; natural hazards;

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References

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Cited by:
  1. Marielle Brunette & Laure Cabantous & Stéphane Couture & Anne Stenger, 2013. "The impact of governmental assistance on insurance demand under ambiguity: a theoretical model and an experimental test," Theory and Decision, Springer, vol. 75(2), pages 153-174, August.
  2. Gawel, Erik & Heuson, Clemens & Lehmann, Paul, 2012. "Efficient public adaptation to climate change: An investigation of drivers and barriers from a Public Choice perspective," UFZ Discussion Papers 14/2012, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
  3. C. Grislain-Letrémy, 2013. "Natural Disasters: Exposure and Underinsurance," Documents de Travail de la DESE - Working Papers of the DESE g2013-12, Institut National de la Statistique et des Etudes Economiques, DESE.
  4. Céline Grislain-Letremy, 2013. "Natural Disters : Exposure and Underinsurance," Working Papers 2013-15, Centre de Recherche en Economie et Statistique.
  5. Grislain-Letrémy, Céline, 2013. "Natural Disasters: Exposure and Underinsurance," Economics Papers from University Paris Dauphine 123456789/13276, Paris Dauphine University.
  6. Paul A. RASCHKY, 2013. "Estimating the Effects of West Sumatra Public Asset Insurance Program on Short-Term Recovery after the September 2009 Earthquake," Working Papers DP-2013-35, Economic Research Institute for ASEAN and East Asia (ERIA).

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