Two Essays on Life Insurance

• Main Authors: Ssu-Min Liu, 劉思敏
• Other Authors: 胡登淵
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/35155614101473987687

碩士 === 淡江大學 === 產業經濟學系碩士班 === 93 === Essay 1：Granger and Newbold (1974) showed that when nonstationary time series are used in a regression model this may cause spurious regression. Hao and Cuou (2001) proposed that the literatures of the demand for life insurance in Taiwan which use time series data have spurious regression problem. To solve the problem, one should detect the time series whether it contains a unit root or not. But Perron (1989) showed the failure to allow for a structural break leads to a bias. Hence, this study use the endogenous two-break LM unit root test derived in Lee and Strazicich (2003). Finally, the empirical results show that personal life insurance coverage of new contracts, personal life insurance premium income, the price of life insurance and per capita national income are with unit roots. Essay 2：The insurance market in Taiwan grows rapidly during the past decade because of the economic growth and less regulation governing the market. The financial market booms in recent years as well and the innovation of various financial products provides diverse channels of investment. The life insurance may become one of the components of portfolio. This study explores whether the financial development affects the consumption of life insurance. The development of financial market provides various choices of investment for consumers, and this may decrease consumers’ demand for life insurance. With the development of financial market, various kinds of life insurance products, nonetheless, appear for diverse needs, and this may increase consumers’ demand for life insurance. This study, hence, tests the relation between consumers’ demand for life insurance and the financial development. It uses the bounds testing approaches developed by Pesaran et al. (2001) to analyze the level relationship between the demand for personal life insurance and the financial development and other demographic and economic determinants in Taiwan. It can be applied irrespective of whether the regressors are I(0), I(1) or mutually integrated, and this avoids carrying out unit root tests which are complained about the low power. The time-series data are collected from various issues of Life Insurance Quarterly and span over the period from 1982 Q3 to 2003 Q4. The evidence can’t support the hypothesis that the development of financial market decreases consumers’ demand for life insurance.