Evidence that waste aversion begets insurance aversion

David de Meza and Liza C. Fessner Diane Reyniers

Economics Letters, 2015, vol. 126, issue C, 75-77

Abstract: Paying an insurance premium but not needing to claim is sometimes viewed as pouring money down the drain. Aversion to the perceived waste may lead to the rejection of fair insurance. Although policies paying rebates if no claim is made are not attractive to expected utility maximisers, this paper finds strong evidence they appeal to waste averters.

Keywords: Insurance; Waste aversion; No-claim rebate; Prospect theory (search for similar items in EconPapers)
JEL-codes: D8 G22 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Evidence that waste aversion begets insurance aversion (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:126:y:2015:i:c:p:75-77

DOI: 10.1016/j.econlet.2014.11.018

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