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The Impact of Public Insurance on Private Insurance Demand

Okura Mahito ()
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Okura Mahito: Faculty of Economics, Nagasaki University, 4-2-1 Katafuchi, Nagasaki 850-8506, Japan

Asia-Pacific Journal of Risk and Insurance, 2015, vol. 9, issue 1, 35-45

Abstract: The purpose of this study is to investigate whether private insurance is a normal good by examining the effects of public insurance. Also, this study investigates how the amount of public insurance premium affects to the private insurance demand. The main results of this study are as follows. First, the private insurance has a tendency to be a normal good whether the public insurance benefit is fixed to household income. Second, the degree of loading of public insurance and average probability of accident taking place, which are the components of public insurance premium, relates to the private insurance demand, but whether this relation is positive or negative is indeterminate unless private insurance is actuarially fair.

Keywords: normal good; inferior good; private insurance; public insurance (search for similar items in EconPapers)
Date: 2015
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Handle: RePEc:bpj:apjrin:v:9:y:2015:i:1:p:35-45:n:5