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Risk-Bearing And Consumption Theory

Published online by Cambridge University Press:  29 August 2014

Denis Moffet
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Abstract

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A simple risky situation is studied in the framework of consumption theory. Saving is shown to be a substitute to insurance. Two new concepts, riskbearing budget and effective risk coverage, are introduced in order to give a more accurate insight into the optimal risk-bearing decision. The effect of a variation in current consumption and in wealth upon the optimal insurance coverage is analysed.

Information

Type
Research Article
Information
ASTIN Bulletin: The Journal of the IAA , Volume 8 , Issue 3 , September 1975 , pp. 342 - 358
Copyright
Copyright © International Actuarial Association 1975

References

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