Abstract
How much should a society spend for the safety of its members? The paper treats that question within the framework of the theory of public expenditures. The methodological foundations of the subjective approach, which underlies the concept of marginal willingness-to-pay for safety, are reviewed. The paper also includes a complete study of the individual demand for life insurance and for (private) safety.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Arrow, K.J. (1971),Essays in the Theory of Risk-Bearing, Amsterdam, North- Holland.
Bergstrom, Th.C. (1978), “Is a Man’s Life Worth More than his Human Capital?” mimeo, C-10, University of Michigan.
Blume M.E. and I. Friend (1975), “The Asset Structure of Individual Portfolios and Some Implications for Utility Functions”,Journal of Finance, 30, 585–603.
Cook, P.J. and D.A. Graham (1977), “The Demand for Insurance and Protection: The Case of the Irreplaceable Commodity”,Quarterly Journal of Economics, 9, 1 143–156.
Drèze, J.H. (1961), “Les fondements logiques de l’utilité cardinale et de la probabilité subjective” inLa Décision, Colloques Internationaux du CNRS (Paris), 73–87.
Drèze, J.H. (1962), “L’utilité sociale d’une vie humaine”,Revue Frangaise de Recherche Opérationnelle, 22, 139–155.
Drèze, J.H. (1971), “Market Allocation under Uncertainty”,European Economic Review, 2, 2, 133–165.
Drèze, J.H. (1981), “Inferring Risk Tolerance from Deductibles in Insurance Contracts”,The Geneva Tapers on Risk and Insurance, 20, 48–52.
Eisner R. and R.H. Strotz (1961), “Flight Insurance and the Theory of Choice”,The Journal of Political Economy, 69, 4, 355–368.
Greenberg, J. (1977), “Pure and Local Public Goods: A Game Theoretic Approach”,Public Finance, A. Sandmo, ed., Lexington, Massachusetts, Heath and Co.
Jones-Lee, M. (1974), “The Value of Changes in the Probability of Death or Injury”,Journal of Political Economy, 99, 835–849.
Jones-Lee, M. (1976),The Value of Life: An Economic Analysis, London, Mart in Robertson.
Karni, E, D. Schmeidler and K. Vind (1982), “On State Dependent Preferences and Subjective Probabilities”, Working Paper 88, The Johns Hopkins University, Baltimore.
Linnerooth, J. (1979), “The Value of Human Life: A Review of the Models”,Economic Inquiry, 17, 52–74.
Milleron, C. (1972), “Theory of Value with Public Goods: A Survey Article”,Journal of Economic Theory, 5, 419–477.
Mishan, E.J. (1971), “Evaluation of Life and Limb: A Theoretical Approach”,Journal of Political Economy, 79, 685 - 705.
Pratt, J. (1964), “Risk-Aversion in the Small and in the Large”,Econometrica, 32, 122–136.
Raiffa, H. (1968),Decision Analysis; Introductory Lectures on Choices under Uncertainty, Reading Mass., Addison-Wesley Publishing Company.
Samuelson, P.A. (1954), “The Pure Theory of Public Expenditures”,Review of Economics and Statistics, 36, 387–389.
Savage, L.J. (1954),The Foundations of Statistics, New York, Wiley.
Stiglitz, J.E. (1911), “The Theory of Local Public Goods” inThe Economics of Public Services, M. Feldstein and R. Inman (eds.) London, MacMillan
Tiebout, C.M. (1956), “A Pure Theory of Local Expenditures”,Journal of Political Economy, 64, 416–424.
Von Neumann, J. and O. Morgenstern, (1947),Theory of Games and Economic Behavior, Princeton, Princeton University Press.
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 1984 D. Reidel Publishing Company
About this chapter
Cite this chapter
Dehez, P., Drèze, J.H. (1984). State-Dependent Utility, the Demand for Insurance and the Value of Safety. In: de Vylder, F., Goovaerts, M., Haezendonck, J. (eds) Premium Calculation in Insurance. NATO ASI Series, vol 121. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-6354-2_5
Download citation
DOI: https://doi.org/10.1007/978-94-009-6354-2_5
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-009-6356-6
Online ISBN: 978-94-009-6354-2
eBook Packages: Springer Book Archive