The paper examines property insurance contracts in which consumers choose the upper limit on coverage. Exclusions are of two types, and both reduce the demand for insurance of the included perils. A practical implication is that an insurer can raise the demand for fire insurance by offering an...

Existing insurance theory fails when applied to real property because it does not account for variations in the economic environment. The article studies optimal property insurance in the presence of two sources of variation: equity risk and conversion risk. Equity risk is randomness of the...

Studies of the cost of construction of nuclear power plants rely upon a measure of cost, called "overnight cost," that contradicts accepted capital theory. The studies report evidence that construction cost per megawatt of capacity decreases as plant scale increases. We employ a more correct...

The paper compares models of insurance of real property when owners may convert damaged property to another use instead of restoring it to the pre-damage use. First it describes the optimum insurance. The main result is that the deductible and the upper limit are connected by the equation: upper...

Insurance considered as brokerage is very different from insurance considered as holding funds. The scale economies which are ubiquitous in the funds model dissipate when insurance is considered as intermediation. There appear to be no barriers to competition, for the potential entrant has no...

This article examines the impact of reimbursement on admissions by nursing homes. Low rates of payment for Medicaid patients suggest that nursing homes should prefer non-Medicaid patients. Such preferences are observable in daily admissions data from some of a sample of 18 Southern California...

Exclusions are part of any property insurance. A prototypically simple contract covers losses from a single peril but excludes losses from all other perils and, typically, from the insured peril in some instances. Demand for insurance is impacted by exlcuded risks. There are two tendencies here:...