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Insurance demand and the elasticity of risk aversion

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Abstract.

The aim of this study is to analyze optimum insurance demand of a risk averse agent. By introducing the concept of elasticity of risk aversion, we describe the interaction of optimum coverage and insurance risk. The agent's revision of her insurance demand is governed by a substitution effect and an income effect.

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Authors and Affiliations

  1. Department of Economics, University of Saarland, 66041 Saarbrücken, Germany (e-mail: u.broll@mx.uni-saarland.de) , , , , , , DE

    Harald L. Battermann & Udo Broll

  2. Department of Finance, University of Dortmund, 44227 Dortmund, Germany , , , , , , DE

    Jack E. Wahl

Authors
  1. Harald L. Battermann
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  2. Udo Broll
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  3. Jack E. Wahl
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Additional information

Received: January 30, 2001 / Accepted: January 14, 2002

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Battermann, H., Broll, U. & Wahl, J. Insurance demand and the elasticity of risk aversion. OR Spectrum 24, 145–150 (2002). https://doi.org/10.1007/s00291-002-0094-2

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  • DOI: https://doi.org/10.1007/s00291-002-0094-2

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