Using a unique insurance dataset for a sample of Chinese publicly listed companies for the period 1997 through 2003, this study tests the simultaneous linkages between debt capacity, cost of debt, and corporate property insurance. Our results suggest that, on the one hand, a higher cost of debt appears to motivate the use of more property insurance, but high leverage alone does not lead to the ...

Farmers’ decisions about how much crop insurance to buy are not generally consistent with either expected profit or utility maximization. They do not pick coverage levels that maximize expected subsidy nor do they demand full insurance coverage. In addition, the absolute size ...

I apply a prospect theory model of risk preferences with an endogenously determined reference point to propose an alternative objective of maximizing expected outcome rather than maximizing expected utility. I show that an agent can always form a consistent expected outcome for any binary gamble and derive a parametric formula, which can then be used to examine the effects of loss aversion, ris...

This study examines the impact of ownership structure on reinsurance decisions in the Chinese property casualty insurance industry. The evidence shows that foreign insurers have higher reinsurance demand than domestic insurers. Specifically, foreign insurers are more likely to purchase volunteer reinsurance. More important, foreign insurers are associated with a higher percentage of facultative...

The American humorist Will Rogers once said: “Insurance is a wonderful thing. It’s the only way the ordinary person can purchase a catastrophe on an instalment plan”. Allowing for the humorous inversion, this quip captures the importance of insurance to people. The basic function of the insurance sector is to take the burden of risk off the shoulders of individual citizens and businesses by ass...

This thesis studies the impact of private information on the existence of insurance markets. In the first chapter, I study the case of insurance rejections. Across a wide set of non-group insurance markets, applicants are rejected based on observable, often high-risk, characteristics. I explore private information as a potential cause by developing and testing a model in which agents have priva...

The research question we address is whether state laws that require health insurance policies to provide coverage for specified benefits have affected the size of the population without any private sector health insurance coverage. The laws are often alleged to increase the cost of insurance premiums and thus reduce incentives for smaller employers to offer and for individuals to purchase healt...