All Rights Reserved
AccessEcon LLC 2006, 2008.
Powered by MinhViet JSC

Mathias Kifmann, Kerstin Roeder and Clarissa Schumacher
''A note on quasi-hyperbolic discounting, risk aversion, and the demand for insurance''
( 2014, Vol. 34 No.2 )
We show that quasi-hyperbolic discounting not only affects savings decisions but also the demand for insurance. In general, insurance demand by quasi-hyperbolic discounters is time-inconsistent. Without liquidity constraints they buy more insurance than initially planned. In the presence of binding liquidity constraints, hyperbolic discounters tend to revise their insurance demand downwards.
Keywords: Insurance demand, quasi-hyperbolic discounting, liquidity constraints, risk aversion
JEL: D1 - Household Behavior: General
D9 - Intertemporal Choice and Growth: General
Manuscript Received : Feb 07 2014 Manuscript Accepted : Apr 23 2014

  This abstract has been downloaded 1557 times                The Full PDF of this paper has been downloaded 155959 times