The Effect of Risk Aversion and Loss Aversion on Equity-Linked Life Insurance With Surrender Guarantees

2016 ◽  
Author(s):  
Christian Hilpert
Keyword(s):  
Risk Aversion ◽  
Life Insurance ◽  
Loss Aversion

scholarly journals Relative risk aversion models: How plausible are their assumptions?

2021 ◽  
pp. 104346312199408
Author(s):  
Carlo Barone ◽  
Katherin Barg ◽  
Mathieu Ichou
Keyword(s):  
Relative Risk ◽  
Risk Aversion ◽  
Loss Aversion ◽  
Educational Inequality ◽  
Risky Choice ◽  
Relative Risk Aversion ◽  
Downward Mobility ◽  
Educational Decisions ◽  
Empirically Supported ◽  
Occupational Risks

This work examines the validity of the two main assumptions of relative risk-aversion models of educational inequality. We compare the Breen-Goldthorpe (BG) and the Breen-Yaish (BY) models in terms of their assumptions about status maintenance motives and beliefs about the occupational risks associated with educational decisions. Concerning the first assumption, our contribution is threefold. First, we criticise the assumption of the BG model that families aim only at avoiding downward mobility and are insensitive to the prospects of upward mobility. We argue that the loss-aversion assumption proposed by BY is a more realistic formulation of status-maintenance motives. Second, we propose and implement a novel empirical approach to assess the validity of the loss-aversion assumption. Third, we present empirical results based on a sample of families of lower secondary school leavers indicating that families are sensitive to the prospects of both upward and downward mobility, and that the loss-aversion hypothesis of BY is empirically supported. As regards the risky choice assumption, we argue that families may not believe that more ambitious educational options entail occupational risks relative to less ambitious ones. We present empirical evidence indicating that, in France, the academic path is not perceived as a risky option. We conclude that, if the restrictive assumptions of the BG model are removed, relative-risk aversion needs not drive educational inequalities.

Uncertain lifetime, risk aversion and life insurance

1985 ◽  
Vol 1985 (2) ◽  
pp. 109-123 ◽  
Author(s):  
Edi Karni ◽  
Itzhak Zilcha
Keyword(s):  
Risk Aversion ◽  
Life Insurance ◽  
Lifetime Risk

How do loss aversion and technology acceptance affect life insurance demand?

2019 ◽  
Vol 27 (12) ◽  
pp. 977-981
Author(s):  
Bálint Zsolt Nagy ◽  
Mónika Anetta Alt ◽  
Botond Benedek ◽  
Zsuzsa Săplăcan
Keyword(s):  
Technology Acceptance ◽  
Life Insurance ◽  
Loss Aversion ◽  
Insurance Demand ◽  
Life Insurance Demand

Security issuance and price impact under loss aversion

2017 ◽  
Vol 04 (02n03) ◽  
pp. 1750036 ◽  
Author(s):  
Weining Niu ◽  
Qingduo Zeng
Keyword(s):  
Numerical Simulation ◽  
Risk Aversion ◽  
Capital Structure ◽  
Loss Aversion ◽  
Price Impact ◽  
Positive Relation ◽  
Corporate Financing ◽  
Negative Relation ◽  
Risk Seeking ◽  
Financing Choice

The paper builds an equilibrium model to analyze the effect of risk aversion, risk seeking and loss aversion on corporate financing choice, capital structure and price impact. It shows that if the probability of a gain is higher than a certain level, risk aversion parameter has a positive relation with capital structure and price impact; while risk seeking parameter has a negative relation with capital structure and price impact, and vice versa. Loss aversion has negative relation with capital structure and price impact. The numerical simulation verifies our findings to some extent.

scholarly journals Enhanced Risk Aversion, But Not Loss Aversion, in Unmedicated Pathological Anxiety

2017 ◽  
Vol 81 (12) ◽  
pp. 1014-1022 ◽  
Author(s):  
Caroline J. Charpentier ◽  
Jessica Aylward ◽  
Jonathan P. Roiser ◽  
Oliver J. Robinson
Keyword(s):  
Risk Aversion ◽  
Loss Aversion ◽  
Pathological Anxiety

The Boundaries of Loss Aversion

2005 ◽  
Vol 42 (2) ◽  
pp. 119-128 ◽  
Author(s):  
Nathan Novemsky ◽  
Daniel Kahneman
Keyword(s):  
Risk Aversion ◽  
Prospect Theory ◽  
Loss Aversion ◽  
Equal Probability ◽  
Preliminary Support ◽  
Complete Account

In this article, the authors propose some psychological principles to describe the boundaries of loss aversion. A key idea is that exchange goods that are given up “as intended” do not exhibit loss aversion. For example, the authors propose that money given up in purchases is not generally subject to loss aversion. The results of several experiments provide preliminary support for the hypotheses. The authors find that, consistent with prospect theory, loss aversion provides a complete account of risk aversion for risks with equal probability to win or lose. The authors propose boundaries for this result and suggest further tests of the model.

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