A Cross-Sectional Study of Risk Aversion and Life Insurance Demand at the Country Level

Kristio Rapi (), Dominicus S. Priyarsono, Siti Jahroh and Toni Bakhtiar
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Kristio Rapi: School of Business, IPB University, Bogor 16128, Indonesia
Dominicus S. Priyarsono: Department of Economics, IPB University, Bogor 16680, Indonesia
Siti Jahroh: School of Business, IPB University, Bogor 16128, Indonesia

JRFM, 2025, vol. 18, issue 3, 1-20

Abstract: This study measured the risk aversion of nineteen selected countries using Szpiro’s approach and analyzed its effect on life insurance demand. Additionally, income and education were included as control variables and tested for their effects on life insurance demand and risk aversion. The results show a positive effect of risk aversion on life insurance demand, while income has a positive effect and education has a negative effect. We also find that income positively affects risk aversion, while education negatively affects it. These findings support the increasing relative risk aversion hypothesis and have significant implications for life insurance demand and pricing analysis.

Keywords: cross-sectional; income; education; life insurance demand; risk aversion (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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