Racial Differences in the Demand for Life Insurance

13 Pages Posted: 5 Aug 2008

See all articles by Michael S. Gutter

Michael S. Gutter

University of Wisconsin - Madison - School of Human Ecology

Charles B. Hatcher

Iowa State University

Abstract

The objective of this article is to measure racial differences in the proportion of human capital that households protect with life insurance. Using the 2004 Survey of Consumer Finances data, racial differences in two stages of the process are tested, where it is assumed that households must decide both whether or not to purchase life insurance and how much of their human capital to insure (if they decide to purchase). Among married and cohabitating households, we find that, controlling for demographics and other factors, there is little difference in life insurance ownership between black and white households but that white households insure a larger proportion of their human capital than black households.

Suggested Citation

Gutter, Michael S. and Hatcher, Charles B., Racial Differences in the Demand for Life Insurance. Journal of Risk & Insurance, Vol. 75, No. 3, pp. 677-689, September 2008. Available at SSRN: https://ssrn.com/abstract=1202447 or http://dx.doi.org/10.1111/j.1539-6975.2008.00279.x

Michael S. Gutter (Contact Author)

University of Wisconsin - Madison - School of Human Ecology ( email )

1225 Observatory Drive
Madison, WI 53706
United States

Charles B. Hatcher

Iowa State University ( email )

Department of Human Development and Family Studies (HDFS)
Ames, IA 50011
United States
515-294-8889 (Phone)
515-294-2502 (Fax)

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