Evidence that waste aversion begets insurance aversion

Paying an insurance premium but not needing to claim is sometimes viewed as pouring money down the drain. Aversion to the perceived waste may lead to the rejection of fair insurance. Although policies paying rebates if no claim is made are not attractive to expected utility maximisers, this paper finds strong evidence they appeal to waste averters.

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Year of publication:	2015
Authors:	de Meza, David ; Reyniers, Diane ; Fessner, Liza C.
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 126.2015, C, p. 75-77
Publisher:	Elsevier
Subject:	Insurance \| Waste aversion \| No-claim rebate \| Prospect theory

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Type of publication:	Article
Classification:	G22 - Insurance; Insurance Companies ; D8 - Information and Uncertainty
Source:	RePEc - Research Papers in Economics

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