Labor Income Risk and Car Insurance in the UK
Journal
The Geneva Papers on Risk and Insurance Theory
ISSN
1554-964X
ISSN-Digital
1554-9658
Type
journal article
Date Issued
2004-06-01
Author(s)
Abstract
Microeconomic theory shows that only under certain conditions higher background risk increases the propensity to insure against independent marketable risks. We provide empirical evidence for the case of labor income risk and car insurance in the UK. The main result is that households with higher labor income risk spend more on insurance. This finding is consistent with microeconomic theory if the utility function is of the HARA type. Moreover, we find that households spend more on insurance if they participate in the stock market.
Language
English
Keywords
Labor Income Risk
Car Insurance in the UK
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Economic Policy
Refereed
Yes
Publisher
Palgrave Macmillan
Publisher place
Basingstoke
Volume
29
Number
1
Start page
55
End page
74
Pages
20
Subject(s)
Eprints ID
235077