INSURANCE CONSUMPTION AND ECONOMIC POLICY UNCERTAINTY IN INDIA: AN ANALYSIS OF ASYMMETRIC EFFECTS

Siddharth Kumar, Naresh Chandra Sahu and Pushp Kumar
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Siddharth Kumar: Indian Institute of Technology Bhubaneswar, Jatni, Khordha, Odisha 752050, India
Naresh Chandra Sahu: Indian Institute of Technology Bhubaneswar, Jatni, Khordha, Odisha 752050, India
Pushp Kumar: Indian Institute of Technology Bhubaneswar, Jatni, Khordha, Odisha 752050, India

The Singapore Economic Review (SER), 2024, vol. 69, issue 02, 637-665

Abstract: This study examines the asymmetric effect of economic policy uncertainty (EPU) on life and non-life insurance consumption in India using monthly data from April 2004–October 2020. The paper has employed a nonlinear autoregressive distributed lag (NARDL) model with a structural break. The results reveal that there exists an asymmetric effect of EPU on life insurance as well as non-life life insurance consumption. A negative relationship is found between EPU and insurance consumption in both life and non-life insurance. Based on the findings, the study suggests the policymakers to consider the asymmetric effects of EPU while formulating insurance-related policies in India.

Keywords: Life insurance consumption; non-life insurance consumption; EPU; NARDL (search for similar items in EconPapers)
JEL-codes: C22 G22 O16 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S0217590821410095

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