Uncertainty of Governmental Relief and the Crowding out of Insurance
AbstractThis 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 InfoPaper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2010-03.
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Insurance demand; governmental relief; natural hazards;
Other versions of this item:
- Paul A. Raschky & Reimund Schwarze & Manijeh Schwindt & Ferdinand Zahn, 2010. "Uncertainty of Governmental Relief and the Crowding out of Insurance," Monash Economics Working Papers 05-10, Monash University, Department of Economics.
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
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