Discussion paper

DP1423 Background Uncertainty and the Demand for Insurance Against Insurable Risks

Theory suggests that people facing higher uninsurable background risk buy more insurance against other risks that are insurable. This proposition is supported by Italian cross-sectional data. It is shown that the probability of purchasing casualty insurance increases with earnings uncertainty. This finding is consistent with consumer preferences being characterized by decreasing absolute prudence.

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Citation

Guiso, L and T Jappelli (1996), ‘DP1423 Background Uncertainty and the Demand for Insurance Against Insurable Risks‘, CEPR Discussion Paper No. 1423. CEPR Press, Paris & London. https://cepr.org/publications/dp1423

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VoxEU Column

Better land use and insurance to mitigate natural disasters

    ![](../../../../../../../../../../var/folders/34/zq18d8kx7kbgby0j06p_j6t40000gn/T/TemporaryItems/NSIRD_screencaptureui_EM2XPo/Screenshot 2022-01-04 at 17.01.16.png)
  • Development
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  • Environment
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  • Taxation