IDEAS home Printed from https://ideas.repec.org/p/tky/fseres/2008cf558.html

Suicide and Life Insurance

Author

Listed:
  • Joe Chen

    (Faculty of Economics, University of Tokyo)

  • Yun Jeong Choi

    (Faculty of Economics, University of Tokyo)

  • Yasuyuki Sawada

    (Faculty of Economics, University of Tokyo)

Abstract

In this paper, we investigate the nexus between life insurance and suicide behavior using OECD cross-country data from 1980 to 2002. Through semiparametric instrumental variable regressions with fixed effects, we find that for the majority of observations, there exists a positive relationship between suicide rate and life insurance density (premium per capita). Since life insurance policies pay death benefits even in suicide cases after the suicide exemption period, the presence of adverse selection and moral hazard suggests an incentive effect that leads to this positive relationship. The novelty of our analysis lies in the use of cross-country variations in the length of the suicide exemption period in life insurance policies as the identifying instrument for life insurance density. Our results provide compelling evidence suggesting the existence of adverse selection and moral hazards in life insurance markets in OECD countries.

Suggested Citation

  • Joe Chen & Yun Jeong Choi & Yasuyuki Sawada, 2008. "Suicide and Life Insurance," CIRJE F-Series CIRJE-F-558, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2008cf558
    as

    Download full text from publisher

    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2008/2008cf558.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. repec:dau:papers:123456789/5369 is not listed on IDEAS
    2. Michael Lokshin, 2006. "Difference-based semiparametric estimation of partial linear regression models," Stata Journal, StataCorp LLC, vol. 6(3), pages 377-383, September.
    3. Eric Neumayer, 2003. "Socioeconomic Factors and Suicide Rates at Large-unit Aggregate Levels: A Comment," Urban Studies, Urban Studies Journal Limited, vol. 40(13), pages 2769-2776, December.
    4. Pierre-Andre Chiappori & Bernard Salanie, 2000. "Testing for Asymmetric Information in Insurance Markets," Journal of Political Economy, University of Chicago Press, vol. 108(1), pages 56-78, February.
    5. Yatchew, A., 1997. "An elementary estimator of the partial linear model," Economics Letters, Elsevier, vol. 57(2), pages 135-143, December.
    6. Hamermesh, Daniel S & Soss, Neal M, 1974. "An Economic Theory of Suicide," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 83-98, Jan.-Feb..
    7. Richard Blundell & Alan Duncan & Krishna Pendakur, 1998. "Semiparametric estimation and consumer demand," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(5), pages 435-461.
    8. Xiaodong Gong & Arthur van Soest & Ping Zhang, 2005. "The effects of the gender of children on expenditure patterns in rural China: a semiparametric analysis," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 509-527, May.
    9. Tomas Philipson & John Cawley, 1999. "An Empirical Examination of Information Barriers to Trade in Insurance," American Economic Review, American Economic Association, vol. 89(4), pages 827-846, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yamamoto, Shinichi & 山本, 信一 & Yoneyama, Takau & 米山, 高生 & Kwon, W. Jean, 2012. "An Experimental Study On Adverse Selection And Moral Hazard," Hitotsubashi Journal of commerce and management, Hitotsubashi University, vol. 46(1), pages 51-64, October.
    2. Daisy Daiqin He & Jian Yang & Michael Compton & Kerry Taylor, 2012. "Authorization in cross-border eHealth systems," Information Systems Frontiers, Springer, vol. 14(1), pages 43-55, March.
    3. Yip, Paul S.F. & Chen, Feng, 2014. "A study on the effect of exclusion period on the suicidal risk among the insured," Social Science & Medicine, Elsevier, vol. 110(C), pages 26-30.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Choi Yun Jeong & Chen Joe & Sawada Yasuyuki, 2015. "Life Insurance and Suicide: Asymmetric Information Revisited," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(3), pages 1127-1149, July.
    2. Lamichhane, Kamal & Sawada, Yasuyuki, 2013. "Disability and returns to education in a developing country," Economics of Education Review, Elsevier, vol. 37(C), pages 85-94.
    3. Jumrani, Jaya, 2023. "How responsive are nutrients in India? Some recent evidence," Food Policy, Elsevier, vol. 114(C).
    4. Gan, Li & Huang, Feng & Mayer, Adalbert, 2015. "A simple test for private information in insurance markets with heterogeneous insurance demand," Economics Letters, Elsevier, vol. 136(C), pages 197-200.
    5. Mérel, Pierre & Ortiz-Bobea, Ariel & Paroissien, Emmanuel, 2021. "How big is the “lemons” problem? Historical evidence from French wines," European Economic Review, Elsevier, vol. 138(C).
    6. Liran Einav & Amy Finkelstein & Mark R. Cullen, 2010. "Estimating Welfare in Insurance Markets Using Variation in Prices," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(3), pages 877-921.
    7. Keane, Michael & Stavrunova, Olena, 2016. "Adverse selection, moral hazard and the demand for Medigap insurance," Journal of Econometrics, Elsevier, vol. 190(1), pages 62-78.
    8. Wanda Mimra & Christian Waibel, 2025. "Contracting Environments and Efficiency in Markets with Hidden Information: An Experiment," American Economic Journal: Microeconomics, American Economic Association, vol. 17(3), pages 35-74, August.
    9. Alois Geyer & Daniela Kremslehner & Alexander Muermann, 2020. "Asymmetric Information in Automobile Insurance: Evidence From Driving Behavior," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 87(4), pages 969-995, December.
    10. Ciprian MatiÅŸ & Eugenia MatiÅŸ, 2013. "Asymmetric Information In Insurance Field: Some General Considerations," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(15), pages 1-17.
    11. Karl Ove Aarbu, 2017. "Asymmetric Information in the Home Insurance Market," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 84(1), pages 35-72, March.
    12. Mitch Kunce, 2021. "The Impact of Socioeconomic Factors on State Suicide Rates: Revisited," Journal of Statistical and Econometric Methods, SCIENPRESS Ltd, vol. 10(4), pages 1-1.
    13. Gene C. Lai & Hisashi Nakamura & Shinichi Yamamoto & Takau Yoneyama, 2021. "Adverse retention: Strategic renewal of guaranteed renewable term life insurance policies," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(4), pages 1001-1022, December.
    14. Peter Arcidiacono & Esteban M. Aucejo & Hanming Fang & Kenneth I. Spenner, 2011. "Does affirmative action lead to mismatch? A new test and evidence," Quantitative Economics, Econometric Society, vol. 2(3), pages 303-333, November.
    15. Antonio Cabrales & Gary Charness & Marie Claire Villeval, 2006. "Competition, Hidden Information and Efficiency: An Experiment," Post-Print halshs-00175051, HAL.
    16. Cagatay Bircan, 2013. "Foreign direct investment and wages: does the level of ownership matter?," Working Papers 157, European Bank for Reconstruction and Development, Office of the Chief Economist.
    17. Mohseni-Cheraghlou, Amin, 2013. "Labor markets and mental wellbeing: Labor market conditions and suicides in the United States (1979–2004)," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 175-186.
    18. Antonio Cabrales & Gary Charness & Marie Villeval, 2011. "Hidden information, bargaining power, and efficiency: an experiment," Experimental Economics, Springer;Economic Science Association, vol. 14(2), pages 133-159, May.
    19. Xiaodong Gong & Laurie Brown, 2017. "The Impacts of the Presence of Disabled Members on Intra-household Allocation in Older Australian Households," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 50(4), pages 398-411, December.
    20. Juan He & Roderick Rejesus & Xiaoyong Zheng & Jose Yorobe, 2018. "Advantageous Selection in Crop Insurance: Theory and Evidence," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(3), pages 646-668, September.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tky:fseres:2008cf558. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CIRJE administrative office (email available below). General contact details of provider: https://edirc.repec.org/data/ritokjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.