TY  - JOUR
AU  - Pauly,Mark V.
AU  - Withers,Kate H.
AU  - Subramanian-Viswana,Krupa
AU  - Lemaire,Jean
AU  - Hershey,John C.
TI  - Price Elasticity of Demand for Term Life Insurance and Adverse Selection
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9925
PY  - 2003
Y2  - August 2003
UR  - http://www.nber.org/papers/w9925
L1  - http://www.nber.org/papers/w9925.pdf
N1  - Author contact info:
Mark Pauly
Health Care Management Department
The Wharton School
University of Pennsylvania
208 Colonial Penn Center
3641 Locust Walk
Philadelphia, PA  19104-6218
E-Mail: pauly@wharton.upenn.edu
AB  - This paper provides an empirical estimate of  price' and  risk' elasticities of demand for term life insurance for those who purchase some insurance. It finds that the elasticity with respect to changes in premiums is generally higher than the elasticity with respect to changes in risk. It also finds that the elasticity, in the range of -0.3 to -0.5, is sufficiently low that adverse selection in term life insurance is unlikely to lead to a death spiral and may not even lead to measured effects of adverse selection on total purchases.
ER  -