EconStor >
ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/26305
  
Title:Property insurance, portfolio selection and their interdependence PDF Logo
Authors:Chang, Fwu-Ranq
Issue Date:2008
Series/Report no.:CESifo working paper 2260
Abstract:This paper studies the interdependence between property insurance and portfolio selection. The insurance premium of property loss is shown to play the role of subsistence consumption in the analysis. Then, “security” becomes a necessity good and an increase in any insurance parameter would make the investor more “conservative.” The effect of a stock market parameter on the marginal propensity to insure is shown to be opposite that on the marginal propensity to consume. Consequently, an increase in volatility would encourage those with a greater-than-unity relative risk aversion to purchase more insurance at the expense of current consumption.
Subjects:insurance premium
subsistence consumption
portfolio substitution
optimal saving under uncertainty
JEL:G11
G22
E21
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

Files in This Item:
File Description SizeFormat
560535422.PDF298.01 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/26305

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.