An Analysis of the Effect of Income on Life Insurance
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This paper aims to analyze the relationship between the gross national income per capita and the premiums per capita of life insurance in the Organization for Economic Co-operation and Development (OECD) countries. The data used comes from OECD.org, a collection of data from the OECD countries collected over the time period of OECD’s existence. We analyzed data over a three year period, from 2010 to 2012, using data from 22 of the 46 OECD countries. We included a total of six variables in our restricted model: gross national income per capita, life expectancy, youth dependency population (0-17), long term interest rates, life insurance as share of the entire insurance market, and fertility rate. In both our simple and multiple regression models, we can see the positive correlation between gross national income per capita and premiums per capita of life insurance. This brings us to state that there is a statistically significant positive correlation between the level of gross national income per capita and the premiums per capita of life insurance in OECD countries.