Willingness to pay for insurance in Denmark

Hansen, J.V.; Jacobsen, R.H.; Lau, M.I.

doi:10.1111/j.1539-6975.2013.12011.x

Willingness to pay for insurance in Denmark

Hansen, J.V.; Jacobsen, R.H.; Lau, M.I.

Authors

J.V. Hansen

R.H. Jacobsen

Professor Morten Lau m.i.lau@durham.ac.uk
Professor

Abstract

We estimate how much Danish households are willing to pay for auto, home, and house insurance. We use a unique combination of claims data from a large Danish insurance company, measures of individual risk attitudes and discount rates from a field experiment with a representative sample of the adult Danish population, and information on household income and wealth from registers at Statistics Denmark. The results show that the willingness to pay is marginally higher than the actuarially fair value under expected utility theory, but significantly higher under rank-dependent utility theory, and up to 600 percent higher than the actuarially fair value.

Citation

Hansen, J., Jacobsen, R., & Lau, M. (2016). Willingness to pay for insurance in Denmark. Journal of Risk and Insurance, 83(1), 49-76. https://doi.org/10.1111/j.1539-6975.2013.12011.x

Journal Article Type	Article
Acceptance Date	Mar 28, 2013
Online Publication Date	Jul 26, 2013
Publication Date	Mar 1, 2016
Deposit Date	Jun 20, 2012
Publicly Available Date	Jul 26, 2016
Journal	Journal of Risk and Insurance
Print ISSN	0022-4367
Electronic ISSN	1539-6975
Publisher	Wiley
Peer Reviewed	Peer Reviewed
Volume	83
Issue	1
Pages	49-76
DOI	https://doi.org/10.1111/j.1539-6975.2013.12011.x
Public URL	https://durham-repository.worktribe.com/output/1475845

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Copyright Statement
This is the peer reviewed version of the following article: Hansen, J. V., Jacobsen, R. H. and Lau, M. I. (2016), Willingness to Pay for Insurance in Denmark. Journal of Risk and Insurance, 83(1): 49-76, which has been published in final form at http://dx.doi.org/10.1111/j.1539-6975.2013.12011.x. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.