Health and Mortality Delta: Assessing the Welfare Cost of Household Insurance Choice

• 成果类型: Article
• 署名作者: Koijen, Ralph S. J.; Van Nieuwerburgh, Stijn; Yogo, Motohiro
• 署名单位: University of London; London Business School; Center for Economic & Policy Research (CEPR); New York University; National Bureau of Economic Research; Princeton University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12273
• 发表日期: 2016
• 页码: 957-1010
• 关键词: life-insurance; care; INFORMATION; selection; MARKETS; motives; demand

摘要

We develop a pair of risk measures, health and mortality delta, for the universe of life and health insurance products. A life-cycle model of insurance choice simplifies to replicating the optimal health and mortality delta through a portfolio of insurance products. We estimate the model to explain the observed variation in health and mortality delta implied by the ownership of life insurance, annuities including private pensions, and long-term care insurance in the Health and Retirement Study. For the median household aged 51 to 57, the lifetime welfare cost of market incompleteness and suboptimal choice is 3.2% of total wealth.