IDEAS home Printed from https://ideas.repec.org/a/wri/journl/v25y2002i1p47-62.html
   My bibliography  Save this article

Relative Effects of Premium Loading and Tax Deductions on the Demand for Insurance

Author

Listed:
  • Joseph G. Eisenhauer

Abstract

This paper derives reduced-form equations for estimating the relative effects of premium loading and income tax deductions on the demand for insurance. In the absence of loading, tax deductions would not affect the equilibrium in the market for individually purchased health insurance. With loading, the proportion of uninsured medical losses due to tax deductibility is equal to the tax rate, assuming constant absolute risk aversion; the proportion is between 40 and 86 percent in the casualty insurance market, and between 30 and 70 percent in the theft insurance market. The effects of tax deductions are greater under decreasing absolute risk aversion.

Suggested Citation

  • Joseph G. Eisenhauer, 2002. "Relative Effects of Premium Loading and Tax Deductions on the Demand for Insurance," Journal of Insurance Issues, Western Risk and Insurance Association, vol. 25(1), pages 47-62.
    • Handle: RePEc:wri:journl:v:25:y:2002:i:1:p:47-62
    as

    Download full text from publisher

    File URL: http://www.insuranceissues.org/PDFs/251E.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. R.A. Somerville, 2004. "Insurance, Consumption, and Saving: A Dynamic Analysis in Continuous Time," American Economic Review, American Economic Association, vol. 94(4), pages 1130-1140, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wri:journl:v:25:y:2002:i:1:p:47-62. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: James Barrese (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.