Evidence that waste aversion begets insurance aversion

David de Meza, Liza C. Fessner and Diane J. Reyniers

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Paying an insurance premium but not needing to claim is sometimes viewed as pouring money down the drain. Aversion to the perceived waste may lead to the rejection of fair insurance. Although policies paying rebates if no claim is made are not attractive to expected utility maximisers, this paper finds strong evidence they appeal to waste averters..

Keywords: Insurance; waste aversion; no-claim rebate; prospect theory (search for similar items in EconPapers)
JEL-codes: D8 G22 (search for similar items in EconPapers)
Date: 2015-01-01
New Economics Papers: this item is included in nep-ias and nep-upt
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Citations: View citations in EconPapers (1)

Published in Economics Letters, 1, January, 2015, 126, pp. 75-77. ISSN: 0165-1765

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Related works:
Journal Article: Evidence that waste aversion begets insurance aversion (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:65272

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