The Declining Effect of Insurance on Life Expectancy

Jonathan Leightner ()
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Jonathan Leightner: Hull College of Business, AllGood Hall, Summerville Campus, Augusta University, 1120 15th Street, Augusta, GA 30912, USA

JRFM, 2022, vol. 16, issue 1, 1-14

Abstract: This paper used Reiterative Truncated Projected Least Squares (RTPLS) to estimate the effects on life expectancy of an additional dollar of insurance premiums for 43 countries. The data shows a clear positive relationship between insurance and life expectancy with insurance premiums increasing much faster than the inflation rate. The relationship d (life expectancy)/ d (insurance) fell by a statistically significant amount (at a 95 percent confidence level) for 35 of the countries (and the eight exceptions to this pattern had relatively short data series). By 2020, the last dollar of per capita insurance increased a US citizen’s life expectancy at birth by only 6 days, a citizen in the United Kingdom by only 9 days, a citizen in Switzerland by only 7 days, and a citizen in Luxembourg by only 1 day. With such small returns to insurance, an important question is, “Could a society gain more life expectancy by shifting money from insurance into alternative uses”?

Keywords: life expectancy; insurance premiums; omitted variables bias; total derivatives; OECD; reiterative truncated projected least squares (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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