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The Demand for Life Insurance in the United States: Long-Run Versus Short-Run


  • K. Thomas Liaw
  • Ronald L. Moy
  • John Chuang


Previous research on life insurance purchases has focused on the long-run demand function. In this paper, we use a speed of adjustment model to determine how quickly households adjust their holdings of life insurance to the optimal level. Our results support the hypothesis that institutional constraints and costs of adjustment keep individuals from instantaneously adjusting their demand for life insurance to optimal levels.

Suggested Citation

  • K. Thomas Liaw & Ronald L. Moy & John Chuang, 1994. "The Demand for Life Insurance in the United States: Long-Run Versus Short-Run," Journal of Insurance Issues, Western Risk and Insurance Association, vol. 17(2), pages 73-84.
  • Handle: RePEc:wri:journl:v:17:y:1994:i:2:p:73-84

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