Understanding the Demand for Pet Insurance

Olivier Armantier and Nicolas Treich

No 26-1794, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: Despite its rapid global growth, pet insurance remains poorly understood. This paper provides the first theoretical and empirical analysis of pet insurance demand in economics. Our model predicts that, unlike standard property insurance, pet insurance demand increases with a non-financial factor, the pet’s companionship value, and is inverse U-shaped with wealth. These predictions are supported empirically by our survey evidence. We also identify determinants and frictions of pet insurance demand, including risk attitudes, education, financial literacy, and liquidity constraints. Finally, we find that pet insurance decisions are more closely associated with health insurance, a non-property insurance, than with car insurance.

JEL-codes: D12 D64 G22 H3 Q18 (search for similar items in EconPapers)
Date: 2026-10
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:132305

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