Price Elasticity of Demand for Term Life Insurance and Adverse Selection /
Pauly, Mark V.
Price Elasticity of Demand for Term Life Insurance and Adverse Selection / Mark V. Pauly, Kate H. Withers, Krupa Subramanian-Viswana, Jean Lemaire, John C. Hershey. - Cambridge, Mass. National Bureau of Economic Research 2003. - 1 online resource: illustrations (black and white); - NBER working paper series no. w9925 . - Working Paper Series (National Bureau of Economic Research) no. w9925. .
August 2003.
This paper provides an empirical estimate of price' and risk' elasticities of demand for term life insurance for those who purchase some insurance. It finds that the elasticity with respect to changes in premiums is generally higher than the elasticity with respect to changes in risk. It also finds that the elasticity, in the range of -0.3 to -0.5, is sufficiently low that adverse selection in term life insurance is unlikely to lead to a death spiral and may not even lead to measured effects of adverse selection on total purchases.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Price Elasticity of Demand for Term Life Insurance and Adverse Selection / Mark V. Pauly, Kate H. Withers, Krupa Subramanian-Viswana, Jean Lemaire, John C. Hershey. - Cambridge, Mass. National Bureau of Economic Research 2003. - 1 online resource: illustrations (black and white); - NBER working paper series no. w9925 . - Working Paper Series (National Bureau of Economic Research) no. w9925. .
August 2003.
This paper provides an empirical estimate of price' and risk' elasticities of demand for term life insurance for those who purchase some insurance. It finds that the elasticity with respect to changes in premiums is generally higher than the elasticity with respect to changes in risk. It also finds that the elasticity, in the range of -0.3 to -0.5, is sufficiently low that adverse selection in term life insurance is unlikely to lead to a death spiral and may not even lead to measured effects of adverse selection on total purchases.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.