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A Cross-Sectional Study of Risk Aversion and Life Insurance Demand at the Country Level

Author

Listed:
  • Kristio Rapi

    (School of Business, IPB University, Bogor 16128, Indonesia)

  • Dominicus S. Priyarsono

    (Department of Economics, IPB University, Bogor 16680, Indonesia)

  • Siti Jahroh

    (School of Business, IPB University, Bogor 16128, Indonesia)

  • Toni Bakhtiar

    (Department of Mathematics, IPB University, Bogor 16680, Indonesia)

Abstract

This study measured the risk aversion of nineteen selected countries using Szpiro’s approach and analyzed its effect on life insurance demand. Additionally, income and education were included as control variables and tested for their effects on life insurance demand and risk aversion. The results show a positive effect of risk aversion on life insurance demand, while income has a positive effect and education has a negative effect. We also find that income positively affects risk aversion, while education negatively affects it. These findings support the increasing relative risk aversion hypothesis and have significant implications for life insurance demand and pricing analysis.

Suggested Citation

  • Kristio Rapi & Dominicus S. Priyarsono & Siti Jahroh & Toni Bakhtiar, 2025. "A Cross-Sectional Study of Risk Aversion and Life Insurance Demand at the Country Level," JRFM, MDPI, vol. 18(3), pages 1-20, February.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:3:p:121-:d:1599482
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