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Handbook of the Economics of Risk and Uncertainty
book

Handbook of the Economics of Risk and Uncertainty

by Mark Machina, W. Kip Viscusi
November 2013
Beginner content levelBeginner
896 pages
35h 10m
English
North Holland
Content preview from Handbook of the Economics of Risk and Uncertainty
Insurance and Insurance Markets
209
Another important result in Mossin (1968) is that insurance coverage is an inferior
good if the insured has decreasing absolute risk aversion. Under this assumption, there
are two opposite effects on the demand for insurance when the loading factor (λ) or the
price of insurance increases: a negative substitution effect and a positive wealth effect.
Hoy and Robson (1981) propose an explicit theoretical condition under which insur-
ance is a Giffen good for the class of constant relative risk aversion functions. Briys et
al. (1989) generalize their analysis and provide a necessary and sufficient condition for ...
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Publisher Resources

ISBN: 9780444536853