publication . Article . Other literature type . 1985

The Price Elasticity of Demand for Whole Life Insurance

DAVID F. BABBEL;
Open Access
  • Published: 01 Mar 1985 Journal: Journal of Finance, volume 40, issue 1 March, pages 225-39
Abstract
In this study a real price index is created for whole life insurance sold in the United States from 1953 to 1979. New purchases of whole life insurance are shown to be negatively related to changes in this cost index, contrary to what has been widely accepted in the insurance literature, but consistent with economic theory. The existence of strong price elasticity of demand for whole life insurance does not ensure, however, that the insurance industry manifests a high degree of price competition. FOR MANY YEARS THE insurance trade literature has been replete with assertions that life insurance consumers are insensitive to variations in price when making their in...
Subjects
free text keywords: Economics and Econometrics, Accounting, Finance, Deferred Acquisition Costs, Auto insurance risk selection, Financial economics, business.industry, business, Price elasticity of demand, Insurance policy, General insurance, Risk pool, Insurability, Actuarial science, Key person insurance, Economics
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publication . Article . Other literature type . 1985

The Price Elasticity of Demand for Whole Life Insurance

DAVID F. BABBEL;