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Insurance Literacy and Spatial Diffusion in the Life Insurance Market: A Subnational Approach in Romania

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  • Codruta Mare
  • Simona Laura Dragoș
  • Ingrid-Mihaela Dragotă
  • Cristian Mihai Dragoș

Abstract

In most Eastern European countries, the life insurance market is poorly developed with respect to the income level of their citizens. Most of the academic literature investigating the determinants of this market focuses on cross-country- or individual-level studies. Our research assesses the specificities of the life insurance market at a subnational level, more specifically at the county level. The behavioral mechanisms are highlighted through cross-section linear regressions with spatial interactions on a database of 42 counties in Romania in 2015. One important result is the positive effect of insurance literacy, estimated in a national survey, on the demand for life insurance. Another significant result is the spatial diffusion process identified in life insurance density between neighboring counties. Among the control variables, we identified a significant positive impact of income and urbanization on the demand for life insurance and a negative impact of the unemployment rate.

Suggested Citation

  • Codruta Mare & Simona Laura Dragoș & Ingrid-Mihaela Dragotă & Cristian Mihai Dragoș, 2019. "Insurance Literacy and Spatial Diffusion in the Life Insurance Market: A Subnational Approach in Romania," Eastern European Economics, Taylor & Francis Journals, vol. 57(5), pages 375-396, September.
    • Handle: RePEc:mes:eaeuec:v:57:y:2019:i:5:p:375-396
    DOI: 10.1080/00128775.2019.1618194
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    Cited by:

    1. Gabriela Mihaela Mure?an & Cristian Mihai Dragos & Codru?a Mare & Simona Laura Dragos & Alexandra Pintea, 2021. "Socio-Economic and Macro-Financial Determinants and Spatial Effects on European Private Health Insurance Markets," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 23(56), pages 290-290, February.
    2. Dragos, Cristian Mihai & Dragos, Simona Laura & Mare, Codruta & Muresan, Gabriela Mihaela & Purcel, Alexandra-Anca, 2023. "Does risk assessment and specific knowledge impact crop insurance underwriting? Evidence from Romanian farmers," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 343-358.
    3. Patricia Born & Douglas Bujakowski, 2022. "Insurance research in Central, Eastern, and Southeastern Europe: What we can learn from XPRIMM data," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 25(2), pages 219-231, June.
    4. Victor Dragotă & Camelia Delcea, 2019. "How Long Does It Last to Systematically Make Bad Decisions? An Agent-Based Application for Dividend Policy," JRFM, MDPI, vol. 12(4), pages 1-34, November.

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