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Insurance and Giffen’s paradox. (English) Zbl 1328.91139

Summary: The letter gives a brief account of how insurance appears as an inferior good in standard economic analysis. It is argued that this result is due to unrealistic assumptions about how insurance premiums are calculated.

MSC:

91B30 Risk theory, insurance (MSC2010)
62P05 Applications of statistics to actuarial sciences and financial mathematics
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References:

[1] Borch, Karl, The optimal insurance contract in a competitive market, Economics Letters, 11, 327-330 (1983) · Zbl 1273.91232
[2] D’Ursel, L.; Lauwers, M., Property insurance, quality and reservation premium, Insurance: Mathematics and Economics, 3, 205-213 (1984) · Zbl 0543.62090
[3] Goovaerts, M.; de Vylder, F.; Haezendonck, J., Insurance premiums (1984), North-Holland: North-Holland Amsterdam · Zbl 0532.62082
[4] Hellwig, M., Moral hazard and monopolistic competitive insurance markets, The Geneva Papers on Risk and Insurance, 8, 44-71 (1983)
[5] Hoy, J.; Robson, A. J., Insurance as a Giffen good, Economics Letters, 8, 47-51 (1981)
[6] Mossin, Jan, Aspects of rational insurance purchasing, Journal of Political Economy, 76, 553-568 (1968)
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. In some cases that data have been complemented/enhanced by data from zbMATH Open. This attempts to reflect the references listed in the original paper as accurately as possible without claiming completeness or a perfect matching.