nep-ias New Economics Papers
on Insurance Economics
Issue of 2012‒02‒08
three papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Business Management

  1. An Examination of How the Level of Yield Aggregation Impacts the Effectiveness of Area-based Insurance Designs By Wang, Yang; Barnett, Barry; Coble, Keith; Harri, Ardian
  2. Health Insurance and Joint OffâFarm Labor Allocation Decisions of Farm Families By D'Antoni, Jeremy M.; Mishra, Ashok K.
  3. Too Risk Averse to Purchase Insurance? A Theoretical Glance at the Annuity Puzzle By Antoine Bommier; François Le Grand

  1. By: Wang, Yang; Barnett, Barry; Coble, Keith; Harri, Ardian
    Keywords: Area yield insurance, risk management, Agricultural and Food Policy, Risk and Uncertainty, Q18, G22,
    Date: 2012
  2. By: D'Antoni, Jeremy M.; Mishra, Ashok K.
    Abstract: Farm operators and spouses have increasingly engaged in off-farm work in recent years. Many studies have analyzed the role of government payments; however, little is known about the impact of health insurance coverage. This study builds on previous literature by using copulas to test for dependence in the labor allocation decisions of the operator and spouse, addressing the importance of fringe benefits to the farm household, and determining how these considerations affect our knowledge of the impact of government payments on off-farm labor. The results indicate that the off-farm hours worked by the operator and spouse are dependent. We then find significant evidence of endogeneity in the health insurance coverage variable. Using the predicted probability of insurance coverage, we find a positive and highly significant relationship with the hours worked off-farm. Further, we find that both coupled and decoupled payments are negatively correlated with the hours worked off-farm.
    Keywords: Health insurance coverage, endogeneity, copula, off-farm labor supply, dependence, bivariate tobit, coupled farm programs payments, decoupled farm program payments, Agribusiness, Farm Management, Food Security and Poverty, Labor and Human Capital, Public Economics, C34, I13, J12, J22, J38, J43, Q12, Q18,
    Date: 2012
  3. By: Antoine Bommier (ETH Zurich, Switzerland); François Le Grand (EMLyon Business School, France and ETH Zurich, Switzerland)
    Abstract: This paper suggests a new explanation for the low level of annuitization, which is valid even if one assumes perfect markets. We show that, as soon there exists a positive bequest motive, sufficiently risk averse individuals should not purchase annuities. A model calibration accounting for temporal risk aversion generates a willingness-to-pay for annuities, which is significantly smaller than the one generated by a standard Yaari (1965) model. Moreover, the calibration predicts that riskless savings finances one third of consumption, in line with empirical findings.
    Keywords: annuity puzzle, insurance demand, bequest, intergenerational transfers, temporal risk aversion, multiplicative preferences
    JEL: D11 D81 D91
    Date: 2012–01

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