Date of Award
5-10-2017
Degree Type
Dissertation
Degree Name
Doctor of Philosophy (PhD)
Department
Risk Management and Insurance
First Advisor
Glenn W. Harrison
Second Advisor
Stephen Shore
Third Advisor
Alejandro Del Valle
Fourth Advisor
Daniel J. Clarke
Abstract
This thesis uses laboratory experiments to develop a methodology to estimate the expected welfare benefits of insurance for individuals, conditional on their risk preferences. This methodology is then applied to study the welfare effects of issues that impact microinsurance, or insurance for the poor. The first result is that insurance take-up not a good proxy for the expected welfare gain of an individual’s choice to purchase or not to purchase insurance. The second result is that basis risk reduces the welfare obtained from index insurance. This welfare is significantly improved by having greater behavioral consistency with the Reduction of Compound Lotteries axiom. Finally, the risk of contract non-performance from the insurer significantly reduces the welfare obtained from insurance purchase decisions.
DOI
https://doi.org/10.57709/10028756
Recommended Citation
Ng, Jia Min, "Investigating Microinsurance Issues by Using Laboratory Experiments to Evaluate the Welfare of Insurance." Dissertation, Georgia State University, 2017.
doi: https://doi.org/10.57709/10028756