Work

W Illingness to P Ay for I Nsurance in D Enmark

Year: 2013

Type: article

Abstract: We estimate how much Danish households are willing to pay for auto, home, and house insurance. We use a unique combination of claims data from a large Danish insurance company, measures of individual risk attitudes and discount rates from a field experiment with a representative sample of the adult Danish population, and information on household income and wealth from registers at Statistics Denmark. The results show that the willingness to pay is marginally higher than the actuarially fair value under expected utility theory, but significantly higher under rank‐dependent utility theory, and up to 600 percent higher than the actuarially fair value.

Source: Journal of Risk & Insurance

DOI: 10.1111/j.1539-6975.2013.12011.x

Authors: Jan V. Hansen, Rasmus H. Jacobsen, Morten I. Lau

Institutions: Copenhagen Business School, Durham University

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: green

Funder: Samfund og Erhverv, Det Frie Forskningsråd

Awards: G210974369, G2960852888