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Type: Journal article
Title: Law and the determinants of property-casualty insurance
Author: Esho, N.
Kirievsky, A.
Ward, D.
Zurbrugg, R.
Citation: Journal of Risk and Insurance, 2004; 71(2):265-283
Publisher: Amer Risk Insurance Assoc Inc
Issue Date: 2004
ISSN: 0022-4367
Statement of
Neil Esho, Anatoly Kirievsky, Damian Ward, Ralf Zurbruegg
Abstract: This article examines the importance of legal rights and enforcement in influencing property-casualty insurance (PCI) consumption. We extend the existing literature by examining the role of legal factors in determining insurance density across countries. Also, measures of risk aversion, loss probability, and price, which overcome limitations of proxies used in the existing literature on insurance demand, are analyzed. Using a panel data set, we apply a generalized methods of moments dynamic system estimator, which relaxes the assumption of strict exogeneity of the regressors and produces unbiased and efficient estimates. The results show a strong positive relationship between the protection of property rights and insurance consumption, which is robust to various model specifications and estimation techniques. Moreover, the results show the purchase of PCI is significantly and positively related to loss probability and income, as well as providing weaker evidence of a negative relationship with price.
Keywords: Insurance; Property Rights; Law
Description: The definitive version is available at
RMID: 0020040494
DOI: 10.1111/j.0022-4367.2004.00089.x
Appears in Collections:Business School publications

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