Wealth Effects on Self-Insurance and Self-Protection against Monetary and Nonmonetary Losses

Kangoh Lee
Additional contact information
Kangoh Lee: Department of Economics, Towson University, Towson, Maryland 21252, e-mail: klee@towson.edu

The Geneva Risk and Insurance Review, 2005, vol. 30, issue 2, 147-159

Abstract: This paper considers the wealth effects on self-insurance and self-protection activities against possible losses of monetary wealth such as properties and nonmonetary wealth such as health. Increased initial income or monetary wealth decreases the demand for self-insurance against monetary wealth loss under the decreasing absolute risk aversion assumption, and has an ambiguous effect on self-protection. However, increased initial monetary wealth increases both self-insurance and self-protection against health loss, explaining empirical trends, if wealth and health are complements. When multiple self-insurance activities against both types of losses are considered, the effect of an increase in initial monetary wealth on self-insurance against health loss remains the same, but the effect on self-insurance against wealth loss depends on the preferences. The Geneva Risk and Insurance Review (2005) 30, 147–159. doi:10.1007/s10713-005-4676-1

Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.palgrave-journals.com/grir/journal/v30/n2/pdf/grir2005180a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/grir/journal/v30/n2/full/grir2005180a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:genrir:v:30:y:2005:i:2:p:147-159

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10713

Access Statistics for this article

The Geneva Risk and Insurance Review is currently edited by Michael Hoy and Nicolas Treich

More articles in The Geneva Risk and Insurance Review from Palgrave Macmillan, International Association for the Study of Insurance Economics (The Geneva Association) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().