The Effect of Wealth and Health Status on Joint Saving and Insurance Decisions

David Crainich

Annals of Economics and Statistics, 2025, issue 158, 105-124

Abstract: The paper analyzes the propensity to seek protection against health risks through insurance contracts and savings. We propose a theoretical model that characterizes the joint demand for these two risk management instruments when individuals are exposed to a disease that has financial and health consequences. We then establish the conditions under which reduced wealth and deteriorated health have a negative effect on this joint demand. Regarding the specific effect of health status on the propensity to take out insurance and save, recent experimental studies indicate that these conditions are likely to be met in practice, raising the question of financial protection for the most vulnerable individuals.

Keywords: Health Risk; Precautionary Savings; Insurance; Health Status. (search for similar items in EconPapers)
JEL-codes: D81 I13 (search for similar items in EconPapers)
Date: 2025
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Working Paper: The effect of wealth and health status on joint saving and insurance decisions (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2025:i:158:p:105-124

DOI: 10.2307/48845130

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