Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/55277 
Autor:innen: 
Erscheinungsjahr: 
2012
Schriftenreihe/Nr.: 
Kiel Working Paper No. 1750
Verlag: 
Kiel Institute for the World Economy (IfW), Kiel
Zusammenfassung: 
Empirical evidence has shown that people are unwilling to insure rare losses at subsidized premiums and at the same time take-up insurance for moderate risks at highly loaded premiums. This paper explores whether prospect theory, in particular diminishing sensitivity and loss aversion, can accommodate this evidence. A crucial factor for applying prospect theory to insurance problems is the choice of the reference point. We motivate and explore two possible reference points, state-dependent initial wealth and final wealth after buying full insurance. It turns out that particularly the latter reference point seems to provide a realistic explanation of the empirical evidence.
Schlagwörter: 
insurance demand
prospect theory
flood insurance
diminishing sensitivity
loss aversion
JEL: 
D14
D81
G21
Dokumentart: 
Working Paper

Datei(en):
Datei
Größe
810.46 kB





Publikationen in EconStor sind urheberrechtlich geschützt.