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Access to Credit Reduces the Value of Insurance / Sonia Jaffe, Anup Malani, Julian Reif.
- Format:
- Book
- Author/Creator:
- Jaffe, Sonia.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w32395.
- NBER working paper series no. w32395
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2024.
- Summary:
- We analyze the value of insurance when individuals have access to credit markets. Loans allow consumers to smooth financial shocks over time, decreasing the value of consumption smoothing from insurance. We derive formulas for the value of insurance that can be taken to data, and show how that value depends on individual characteristics and features of loans. We estimate that access to a five-year loan decreases the values of community- and experience-rated insurance for the average beneficiary by $232-$366 (58--61%). Even for the sickest decile, this loan access reduces the value of community-rated insurance by $1,099 (17%).
- Notes:
- Print version record
- May 2024.
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