A number of Web sites, such as www.quickquote.com, offer instant quotes for term life insurance. Use one such Web site to compare the prices of $1 million 10-year term life policies for 50-year-old men and women. Explain the difference in quotes for mean women. Suppose the U.S. government were to pass a law requiring insurers to offer the same prices for men and women. What effect would you expect the law to have on prices and insurance coverage?
Answer to relevant QuestionsWhat is consumption smoothing? How does insurance help people smooth consumption? Why does the government mandate individuals to purchase their own insurance income cases—such as automobile liability insurance—but directly provide insurance to people in other situations—such as health insurance? Billy Joe has utility of U = ln(C), while Bobby Sue has utility of U = √C. Which person is more risk averse? Which person would pay the higher insurance premium to smooth consumption? Consider two households, the Smiths and the Joneses. The Smiths are a two-earner household: both Dick and Jane Smith work and earn the same amount each year. The Joneses are a one-earner household: Sally Jones works while ...Suppose that you had information about the amount of private savings during the years before and after the introduction of the Social Security program. How might you carry out a difference-in-difference analysis of the ...
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