Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5069387 | Finance Research Letters | 2014 | 6 Pages |
Abstract
In the mean-variance framework, insurance demand goes down when the expected size of insurable losses decreases or insurance premia increase if the elasticity of risk aversion with respect to expected wealth exceeds -1. In terms of the expected-utility approach, this condition is equivalent to the index of partial relative risk aversion being lower than one.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Thomas Eichner, Andreas Wagener,