Estimation of demand function for life insurance in Turkey

ABSTRACTIn this study, the life insurance demand function concerning Turkeyhas been estimated by searching the variables, which affect the lifeinsurance demand in the world. The study consists of three chapters. In thefirst chapter, definitions of insurance and life insurance, their features andtypes have been explained. Besides, in this chapter the development processof insurance business and life insurance business in the world and in Turkey,the total premium volume of life and non-life insurance have been noted. Inthe second chapter of the study, in order to determine the variables whichaffect the life insurance demand in Turkey, the variables used in estimatingthe life insurance demand models in the literature have been analyzed.Moreover, it has been defined that in which way these variables affect thedemand, how they are joined to the model and what kinds of results there areto be encountered. In the third chapter of the study, constituting a lifeinsurance demand function for Turkey has been attempted. Concerningvariable choice in the model, models that have been previously constitutedhave been used and the stagnant of these variables has been analyzed bymeans of Augmented Dickey-Fuller test. Later on, the best life insurancedemand function parameters for Turkey have been interpreted by estimatingwith Ordinary Least Squares Method. According to the empirical resultsextracted from this study, inflation, interest rate, dependency ratio have beenfound significant variables which affect the demand of life insurance inTurkey.