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on Insurance Economics |
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Issue of 2010‒07‒17
nine papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Bussiness Management |
| By: | Gurdev Singh |
| Abstract: | This working paper discusses the dependence of Indian agriculture on uncertain rains. In addition the farmers experience other production risks as well as marketing risks related to different crop enterprises and for different agro-climatic regions and areas. It then argues on the need for crop insurance as an alternative to manage production risk. It then takes up the historical overview of crop insurance products and their performance. It is followed by the discussion on the currently available crop insurance products for specific crops and regions. It discusses at length the two important products, namely, National Agricultural Insurance Scheme and Weather Based Insurance Scheme. It also reflects on some deficiencies in these products. [W.P. No. 2010-06-01 |
| Keywords: | Indian agriculture,uncertain rains, crop enterprises, crop insurance, agro-climatic regions, performance, National Agricultural Insurance Scheme, Weather Based Insurance Scheme |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2631&r=ias |
| By: | Carolin Hecht; Katja Hanewald |
| Abstract: | We exploit the natural experiment of the 2005 income tax reform in Germany to study the effects of tax incentives on consumer behavior in life insurance markets. Our empirical analysis of sociodemographic, economic, and psychological household characteristics elicited in the German SAVE study shows that two very different consumer groups buy (endowment) life insurance before and after the tax reform. We find that education plays a central role in reactions to the modified tax environment. Our stylized characterization of “arbitrageur” and “straggler” buyers will assist both life insurance firms and regulatory authorities design effective policies. |
| Keywords: | life insurance demand, tax incentives, financial literacy |
| JEL: | D12 D14 D91 G22 K34 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2010-034&r=ias |
| By: | Hill, Ruth Vargas; Viceisza, Angelino |
| Abstract: | We conduct a framed field experiment in rural Ethiopia to test the seminal hypothesis that insurance provision induces farmers to take greater, yet profitable, risks. Farmers participated in a game protocol in which they were asked to make a simple decision: whether to purchase fertilizer, and if so, how many bags. The return to fertilizer was dependent on a stochastic weather draw made in each round of the game protocol. In later rounds of the game protocol, a random selection of farmers made this decision in the presence of a stylized weather-index insurance contract. Insurance was found to have some positive effect on fertilizer purchases. Purchases were also found to depend on the realization of the weather in the previous round. We explore the mechanisms of this relationship and find that it may be the result of both changes in wealth weather brings about and changes in perceptions of the costs and benefits of fertilizer purchases. |
| Keywords: | Fertilizer, field experiment, hypothesis, input response, Insurance, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:974&r=ias |
| By: | Anne Lauringson |
| Abstract: | This paper uses a unique dataset about unemployment insurance recipients and their exits to employment in Estonia to investigate the effects of benefits on unemployment duration. The administrative data used clearly pinpoints total unemployment spells and exits to employment. Both nonparametric and parametric estimations show that unemployment benefits have a strong and significant disincentive effect on hazard rates to exit into employment, just as search theory predicts. The effects of benefits are stronger and more homogeneous when the maximum duration of unemployment insurance benefit is longer. Unemployed people eligible for shorter unemployment insurance benefits are influenced more by the size of benefits and changes in the benefit replacement rate. Also, for both groups there is a rise in hazard rates during the benefit period and a sharp drop straight after. |
| Keywords: | unemployment benefits, disincentive effects, Estonia |
| JEL: | J64 J65 C41 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:70&r=ias |
| By: | Fanti, Luciano; Gori, Luca |
| Abstract: | This paper analyses the dynamics of a simple overlapping generations economy with endogenous longevity, endogenous fertility and private transfers from children to parents. In this context, it is shown that both the public provision of health care services, which determines the individual length of life, and the size of the intra-family transfer may be a source of chaotic cycles when individuals are perfect foresighted. However, such economic factors also have the potential to ultimately suppress undesirable chaotic fluctuations. This suggests that the equilibrium dynamics of an OLG growth model may endogenously reconcile the existence of both irregular business cycles and the global stability of the economic system. |
| Keywords: | Endogenous fertility; OLG model; Perfect foresight; Private old-age support; Public health care services |
| JEL: | J14 H55 I18 J18 C62 |
| Date: | 2010–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23697&r=ias |
| By: | Jody Schimmel (Mathematica); David C. Stapleton (Mathematica); Jae Song (Social Security Administration) |
| Abstract: | Fewer Social Security Disability Insurance (DI) beneficiaries have their earnings suspended or terminated because of work than those who return to work, partly because beneficiaries "park" earnings at a level below substantial gainful activity (SGA) to retain benefits. We assess the extent of parking by examining how beneficiary earnings and months off the rolls for work responded to a 1999 change in the SGA level for non-blind beneficiaries from $500 to $700 per month. Specifically, our difference-in-difference analysis compares longitudinal data for two beneficiary cohorts with different incentives to park their earnings; one experienced the increased SGA level the first year after its Trial Work Period (TWP), when beneficiaries can earn any amount without losing benefits, while the two-year-earlier cohort did not. The impact of the increased SGA level is consistent with parking, but its magnitude small. The reduction in TWP completers with earnings less than $500 was 0.9 percentage points, the reduction in the percentage with earnings over $700 was 1.2 percentage points, and the increase for those with earnings between $500 and $700 was 2.2 percentage points. However, there was no change in mean earnings; small increases for those with relatively low earnings were offset by reductions for those with relatively high earnings. The SGA increase had a significant negative effect on the average number of months that beneficiaries were off the rolls for work; the effect was largest - about six-tenths of a month - for those who earned $500 to $700 during in year they completed their TWP. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp220&r=ias |
| By: | Paolo Verme (University of Torino) |
| Abstract: | The transitional economies of the Former Soviet Union (FSU) have enjoyed an extraordinary period of growth and poverty reduction between 2000 and 2007 and this occurred in concomitance with significant increases in private and public transfers to households. The paper assesses the relative importance of these transfers for welfare and poverty in Moldova, the poorest country in Europe. A longitudinal analysis based on panel data reveals that private transfers and social insurance transfers are effective in improving welfare and reducing poverty whereas social assistance transfers have little or no effect. Social insurance and social assistance seem to have swapped roles. Social insurance is most relevant for lifting people out of poverty while social assistance - if anything - has a small role in protecting the non-poor from falling into poverty. We also find that the different types of transfers do not crowd-out each other and that social insurance may in fact reinforce the capacity of private transfers to reduce poverty. Such findings have several policy implications for the near future: a) Poor households in FSU transitional economies remain highly vulnerable to shocks in public and private transfers; b) the 2008-2009 recession is likely to expose this vulnerability and result in a surge in poverty larger than expected and c) the social assistance systems remain in great need of pro-poor reforms and cannot currently provide an adequate protection from economic shocks. |
| Keywords: | Private transfers, social insurance, social assistance, transitional economies. |
| JEL: | H5 I3 O1 P2 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2010-176&r=ias |
| By: | Juergen Jung (Department of Economics, Towson University); Chung Tran (School of Economics, University of New South Wales) |
| Abstract: | In this paper we construct life-cycle profiles of U.S. health care spending using data from the Medical Expenditure Panel Survey (MEPS). We separate pure age effects on health expenditure from time effects (i.e. productivity effects, business cycle effects, etc.) and cohort effects (i.e. initial condition effects) by estimating a seminonparametric partial linear model. After controlling for time and cohort effects, we find that medical expenditure-age profiles follow an upward trend. Time and cohort effects introduce a significant estimation bias into predictions of health expenditures per age group. It is demonstrated that failing to adequately control for time and cohort effects results in an overprediction of the effect of age on health expenditures, especially for agents older than 60. Cohort effect biases dominate time effect biases in estimates of health expenditures that do not adequately control for both effects. Estimation biases introduced by cohort effects increase monotonically with age while time effects are non-monotone. |
| Keywords: | life-cycle profiles; time and cohort effects; partial linear seminonparametric models; pseudo panels; medical expenditure panel survey (MEPS) |
| JEL: | I10 I11 C14 C23 D12 D91 J10 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2010-08&r=ias |
| By: | Alejandro Portes (Princeton University); Patricia Fernández-Kelly (Princeton University); Donald W. Light (University of Medicine and Dentistry of New Jersey) |
| Abstract: | We examine the interaction between the immigration and health systems of the United States on the basis of a study of forty health care delivery institutions in Florida, California, and New Jersey. We list and examine barriers to care encountered by the foreign-born, especially unauthorized immigrants, and the systemic contradictions of widespread demand for their labor with absence of legal channels to regulate the flow and provide it with a modicum of legal protection. The inaccessibility and high costs of the American health system have forced the uninsured poor into a series of coping strategies. Our study uncovered a set of coping mechanisms specific to the immigrant population. We describe them and examine their interaction with U.S. commercial medicine. The analysis concludes with a focus on regional differences that highlight the importance of local politics and history in ameliorating or hardening the precarious health situation confronted by the foreign-born and the ways in which this situation plays back on the communities where they settle. |
| Keywords: | unauthorized immigration, health insurance, language assimilation, transnationalism |
| JEL: | D10 D63 H31 J11 N32 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cmgdev:1237&r=ias |