Illiquid Housing as Self-Insurance: The Case of Long Term Care

24 Pages Posted: 25 Aug 2007 Last revised: 17 Jan 2008

See all articles by Thomas Davidoff

Thomas Davidoff

University of British Columbia (UBC) - Sauder School of Business

Date Written: January 9, 2008

Abstract

Long term care is one of the few observable triggers for home sale among the elderly. Combined with a thin reverse mortgage market, this helps rationalize weak demand for Long Term Care Insurance (LTCI). Home equity typically tapped primarily in the event of long term care reduces the gain to insurance transfers from healthy states. Households exposed to large increases in home equity in the recent housing boom were relatively unlikely to add LTCI coverage and relatively likely to drop coverage.

Keywords: Portfolio Choice, Insurance, Health Care, Housing Demand

JEL Classification: G11, G22, I11, R21

Suggested Citation

Davidoff, Thomas, Illiquid Housing as Self-Insurance: The Case of Long Term Care (January 9, 2008). Available at SSRN: https://ssrn.com/abstract=1009738 or http://dx.doi.org/10.2139/ssrn.1009738

Thomas Davidoff (Contact Author)

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
285
Abstract Views
1,718
rank
127,803
PlumX Metrics