Determinants of Life Insurance Demand: Evidence from Ethiopia

Tilahun Shewangezaw Kura; Habtamu Alebachew Legass

doi:doi:10.11648/j.ijfbr.20210706.12

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Determinants of Life Insurance Demand: Evidence from Ethiopia

Tilahun Shewangezaw Kura, Habtamu Alebachew Legass

Published in International Journal of Finance and Banking Research (Volume 7, Issue 6)

Received: 19 November 2021 Accepted: 14 December 2021 Published: 24 December 2021

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Abstract

Life insurance is a financial product that aims to protect dependents against the risks of premature death or disability of the insured party. Various pieces of evidence and literature show that the level of life insurance business and its demand in Ethiopia is very low. As a result, this thesis paper focused on potential ways of increasing the life insurance demand by investigating the determinants of the demand for life insurance in Ethiopia. Specifically, this study aims to investigate the effect of savings, growth in per capita income, total population growth, urbanization, political instability, and health expenditure to GDP on demand for life insurance in Ethiopia in both the short run and long run by using a secondary source of data collected between 1995 and 2019. The study employed both descriptive statistics and the Autoregressive distributive lag model (ARDL) to compute the characteristics of institutional, social security, macro-economic and demographic factors and to identify their effect on demand for life insurance respectively. The findings of the study revealed that savings, growth in per capita income, total population growth, urbanization, and political instability have a positive and significant effect on demand for life insurance in Ethiopia. Whereas, health expenditure to GDP has been found insignificant in the long run. In addition, all variables apart from total population growth and political instability which has a positive effect do not affect life insurance demand in the short run.

Published in	International Journal of Finance and Banking Research (Volume 7, Issue 6)
DOI	10.11648/j.ijfbr.20210706.12
Page(s)	144-154
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Life Insurance, Autoregressive Distributive Lag Model, Political Instability, Urbanization, Total Population Growth

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APA Style

Tilahun Shewangezaw Kura, Habtamu Alebachew Legass. (2021). Determinants of Life Insurance Demand: Evidence from Ethiopia. International Journal of Finance and Banking Research, 7(6), 144-154. https://doi.org/10.11648/j.ijfbr.20210706.12

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ACS Style

Tilahun Shewangezaw Kura; Habtamu Alebachew Legass. Determinants of Life Insurance Demand: Evidence from Ethiopia. Int. J. Finance Bank. Res. 2021, 7(6), 144-154. doi: 10.11648/j.ijfbr.20210706.12

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AMA Style

Tilahun Shewangezaw Kura, Habtamu Alebachew Legass. Determinants of Life Insurance Demand: Evidence from Ethiopia. Int J Finance Bank Res. 2021;7(6):144-154. doi: 10.11648/j.ijfbr.20210706.12

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@article{10.11648/j.ijfbr.20210706.12,
  author = {Tilahun Shewangezaw Kura and Habtamu Alebachew Legass},
  title = {Determinants of Life Insurance Demand: Evidence from Ethiopia},
  journal = {International Journal of Finance and Banking Research},
  volume = {7},
  number = {6},
  pages = {144-154},
  doi = {10.11648/j.ijfbr.20210706.12},
  url = {https://doi.org/10.11648/j.ijfbr.20210706.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20210706.12},
  abstract = {Life insurance is a financial product that aims to protect dependents against the risks of premature death or disability of the insured party. Various pieces of evidence and literature show that the level of life insurance business and its demand in Ethiopia is very low. As a result, this thesis paper focused on potential ways of increasing the life insurance demand by investigating the determinants of the demand for life insurance in Ethiopia. Specifically, this study aims to investigate the effect of savings, growth in per capita income, total population growth, urbanization, political instability, and health expenditure to GDP on demand for life insurance in Ethiopia in both the short run and long run by using a secondary source of data collected between 1995 and 2019. The study employed both descriptive statistics and the Autoregressive distributive lag model (ARDL) to compute the characteristics of institutional, social security, macro-economic and demographic factors and to identify their effect on demand for life insurance respectively. The findings of the study revealed that savings, growth in per capita income, total population growth, urbanization, and political instability have a positive and significant effect on demand for life insurance in Ethiopia. Whereas, health expenditure to GDP has been found insignificant in the long run. In addition, all variables apart from total population growth and political instability which has a positive effect do not affect life insurance demand in the short run.},
 year = {2021}
}

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TY  - JOUR
T1  - Determinants of Life Insurance Demand: Evidence from Ethiopia
AU  - Tilahun Shewangezaw Kura
AU  - Habtamu Alebachew Legass
Y1  - 2021/12/24
PY  - 2021
N1  - https://doi.org/10.11648/j.ijfbr.20210706.12
DO  - 10.11648/j.ijfbr.20210706.12
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
SP  - 144
EP  - 154
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20210706.12
AB  - Life insurance is a financial product that aims to protect dependents against the risks of premature death or disability of the insured party. Various pieces of evidence and literature show that the level of life insurance business and its demand in Ethiopia is very low. As a result, this thesis paper focused on potential ways of increasing the life insurance demand by investigating the determinants of the demand for life insurance in Ethiopia. Specifically, this study aims to investigate the effect of savings, growth in per capita income, total population growth, urbanization, political instability, and health expenditure to GDP on demand for life insurance in Ethiopia in both the short run and long run by using a secondary source of data collected between 1995 and 2019. The study employed both descriptive statistics and the Autoregressive distributive lag model (ARDL) to compute the characteristics of institutional, social security, macro-economic and demographic factors and to identify their effect on demand for life insurance respectively. The findings of the study revealed that savings, growth in per capita income, total population growth, urbanization, and political instability have a positive and significant effect on demand for life insurance in Ethiopia. Whereas, health expenditure to GDP has been found insignificant in the long run. In addition, all variables apart from total population growth and political instability which has a positive effect do not affect life insurance demand in the short run.
VL  - 7
IS  - 6
ER  -

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Author Information

Tilahun Shewangezaw Kura

Department of Accounting and Finance, College of Business and Economics, Dire Dawa University, Dire Dawa, Ethiopia
Habtamu Alebachew Legass

Department of Accounting and Finance, College of Business and Economics, Dire Dawa University, Dire Dawa, Ethiopia

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APA Style

Tilahun Shewangezaw Kura, Habtamu Alebachew Legass. (2021). Determinants of Life Insurance Demand: Evidence from Ethiopia. International Journal of Finance and Banking Research, 7(6), 144-154. https://doi.org/10.11648/j.ijfbr.20210706.12

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ACS Style

Tilahun Shewangezaw Kura; Habtamu Alebachew Legass. Determinants of Life Insurance Demand: Evidence from Ethiopia. Int. J. Finance Bank. Res. 2021, 7(6), 144-154. doi: 10.11648/j.ijfbr.20210706.12

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AMA Style

Tilahun Shewangezaw Kura, Habtamu Alebachew Legass. Determinants of Life Insurance Demand: Evidence from Ethiopia. Int J Finance Bank Res. 2021;7(6):144-154. doi: 10.11648/j.ijfbr.20210706.12

Copy | Download

@article{10.11648/j.ijfbr.20210706.12,
  author = {Tilahun Shewangezaw Kura and Habtamu Alebachew Legass},
  title = {Determinants of Life Insurance Demand: Evidence from Ethiopia},
  journal = {International Journal of Finance and Banking Research},
  volume = {7},
  number = {6},
  pages = {144-154},
  doi = {10.11648/j.ijfbr.20210706.12},
  url = {https://doi.org/10.11648/j.ijfbr.20210706.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20210706.12},
  abstract = {Life insurance is a financial product that aims to protect dependents against the risks of premature death or disability of the insured party. Various pieces of evidence and literature show that the level of life insurance business and its demand in Ethiopia is very low. As a result, this thesis paper focused on potential ways of increasing the life insurance demand by investigating the determinants of the demand for life insurance in Ethiopia. Specifically, this study aims to investigate the effect of savings, growth in per capita income, total population growth, urbanization, political instability, and health expenditure to GDP on demand for life insurance in Ethiopia in both the short run and long run by using a secondary source of data collected between 1995 and 2019. The study employed both descriptive statistics and the Autoregressive distributive lag model (ARDL) to compute the characteristics of institutional, social security, macro-economic and demographic factors and to identify their effect on demand for life insurance respectively. The findings of the study revealed that savings, growth in per capita income, total population growth, urbanization, and political instability have a positive and significant effect on demand for life insurance in Ethiopia. Whereas, health expenditure to GDP has been found insignificant in the long run. In addition, all variables apart from total population growth and political instability which has a positive effect do not affect life insurance demand in the short run.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - Determinants of Life Insurance Demand: Evidence from Ethiopia
AU  - Tilahun Shewangezaw Kura
AU  - Habtamu Alebachew Legass
Y1  - 2021/12/24
PY  - 2021
N1  - https://doi.org/10.11648/j.ijfbr.20210706.12
DO  - 10.11648/j.ijfbr.20210706.12
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
SP  - 144
EP  - 154
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20210706.12
AB  - Life insurance is a financial product that aims to protect dependents against the risks of premature death or disability of the insured party. Various pieces of evidence and literature show that the level of life insurance business and its demand in Ethiopia is very low. As a result, this thesis paper focused on potential ways of increasing the life insurance demand by investigating the determinants of the demand for life insurance in Ethiopia. Specifically, this study aims to investigate the effect of savings, growth in per capita income, total population growth, urbanization, political instability, and health expenditure to GDP on demand for life insurance in Ethiopia in both the short run and long run by using a secondary source of data collected between 1995 and 2019. The study employed both descriptive statistics and the Autoregressive distributive lag model (ARDL) to compute the characteristics of institutional, social security, macro-economic and demographic factors and to identify their effect on demand for life insurance respectively. The findings of the study revealed that savings, growth in per capita income, total population growth, urbanization, and political instability have a positive and significant effect on demand for life insurance in Ethiopia. Whereas, health expenditure to GDP has been found insignificant in the long run. In addition, all variables apart from total population growth and political instability which has a positive effect do not affect life insurance demand in the short run.
VL  - 7
IS  - 6
ER  -

Copy | Download