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Household Refundable Utility by taking out refundable insurance: Empirical study in the Spanish auto insurance market

Author

Listed:
  • Claramunt, M. Mercè
  • Costa, Teresa
  • Mármol, Maite
  • Varea, Xavier

Abstract

This study investigates the expected benefits for Spanish households if they choose to purchase a refundable insurance policy that covers the deductible in the event of vehicle accidents. Using data obtained from the Spanish Survey of Household Finances alongside market data, this paper provides valuable empirical insights concerning the impact of refundable insurance policies on the overall expected utility of households (referred to as Household Refundable Utility) both from a technical-actuarial and a microeconomic point of view.

Suggested Citation

  • Claramunt, M. Mercè & Costa, Teresa & Mármol, Maite & Varea, Xavier, 2024. "Household Refundable Utility by taking out refundable insurance: Empirical study in the Spanish auto insurance market," Economics Letters, Elsevier, vol. 241(C).
    • Handle: RePEc:eee:ecolet:v:241:y:2024:i:c:s0165176524003033
    DOI: 10.1016/j.econlet.2024.111819
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    References listed on IDEAS

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    1. M. E. Ghitany & D. K. Al-Mutairi, 2008. "Size-biased Poisson-Lindley distribution and its application," Metron - International Journal of Statistics, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 299-311.
    2. M Mercè Claramunt & Maite Mármol, 2021. "Is a Refundable Deductible Insurance an advantage for the insured? a mathematical approach," PLOS ONE, Public Library of Science, vol. 16(2), pages 1-22, February.
    3. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    4. Schoemaker, Paul J H, 1982. "The Expected Utility Model: Its Variants, Purposes, Evidence and Limitations," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 529-563, June.
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    More about this item

    Keywords

    Auto insurance; Refundable insurance; Expected utility; Risk-aversion;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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