Assuming a risk-neutral bank and assuming household utility to be exponential, we show how under information symmetry …

We develop a method to estimate domain-specific risk. We apply the method to sickness insurance by fitting a utility … risk aversion increases with income. Second, marginal utility is higher in the sick state conditional on income, due to an … observed fixed cost of sickness. Third, the domain-specificity of risk shifts the focus on the smoothing of utility, not …