Entropy Characterisation of Insurance Demand: Theory and Evidence
This paper characterises the insurance demand in terms of the entropy of the underlying probability distribution for losses. A characterisation of this nature provides the prediction that insurance for large losses with small probabilities tends to be purchased less frequently than insurance for moderate losses with higher probabilities, without deviating from the standard expected utility framework. The predictions of the theoretical model are tested empirically using household data collected in Vietnam.
Year of publication: |
2010-02
|
---|---|
Authors: | Hiroyuki, NAKATA ; Yasuyuki, SAWADA ; Mari, TANAKA |
Institutions: | Research Institute of Economy, Trade and Industry (RIETI) |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Asking Retrospective Questions in Household Surveys: Evidence from Vietnam
Hiroyuki, NAKATA, (2010)
-
Disasters and Risk Perception: Evidence from Thailand Floods
Hiroyuki, NAKATA, (2014)
-
Natural Disasters, Land Price, and Location of Firms: Evidence from Thailand
Yasuyuki, SAWADA, (2014)
- More ...