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Demographic Factors and Price Distortions in Insurance
Author(s) -
Cheung Ron,
Cole Cassandra R.,
Macpherson David A.,
McCullough Kathleen A.,
Nyce Charles
Publication year - 2015
Publication title -
risk management and insurance review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.386
H-Index - 16
eISSN - 1540-6296
pISSN - 1098-1616
DOI - 10.1111/rmir.12027
Subject(s) - demographics , race (biology) , census , demographic economics , unintended consequences , census tract , economics , population , actuarial science , demographic change , age groups , public economics , business , demography , political science , botany , sociology , law , biology
Few papers have analyzed the potential linkages between price distortions and the specific demographic and political traits of customers. The existence of price distortions may have adverse and potentially unintended impacts on certain demographic groups, leading to significant public policy concerns. The current study uses census tract data and rating factors to examine age, income, and race demographics in an effort to determine if any subgroups of the population are adversely impacted by the price distortions of property insurance. The results suggest that Hispanics, lower income households, and specific age groups pay relatively more for insurance coverage than comparison groups.