How COVID-19 affects Insurance Demand?: Multiattribute Utility and Sign of Cross-Derivative

The sign of cross-derivative of the utility function plays an important role because it captures trade-offs between attributes. This study aims to estimate the sign of the cross-derivative using a Japanese representative survey on the intention to purchase two types of insurance, those are income protection insurance and death insurance, before and during the COVID-19 pandemic.

First, we construct an economic model of the demand for income protection insurance and death insurance under the COVID-19 pandemic. We also examine how the sign of the cross-derivative affects the optimal demand for insurance when the government increases government spending such as lockdowns against the infection. Finally, we estimate the sign of the cross-derivative from a large representative survey of the intention to purchase both types of insurance in Japan. We find that preferences exhibit correlation aversion.

Online attendance

Interested individuals should contact healtheconomics@ese.eur.nl if they would like to attend the seminar virtually.