Browsing by Author "Gebreyes Roman"

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    Determinants of Life Insurance Demand in Ethiopia
    (Addis Ababa University, 2011-06) Gebreyes Roman; Alemu Tekie
    The Ethiopian insurance industry is experiencing encouraging growth since its inception in 1905; however, there is still low level insurance penetration equal to 0.2 % of GDP. The paper tries to explore the determinants of life insurance demand in Ethiopia using a time series data over the period of 1980-2009 within an error correction model. The co-integration test revealed financial development (FD) and inflation are significant variables both in the long run and short run dynamic regression with their positive and negative sign respectively. A change in income has a positively correlated in the short run, while the long run regression shows that current income is inversely related to demand for life insurance. The current price of insurance, a change in real interest rate (RIR) and gross domes tic saving per-capita(GDS) have significant but inversely related to demand for life insurance in Ethiopia. The error correction term is significant at 1 percent with a feedback effect of about 63 percent. The explanatory power of the independent variables is also strong at about 98 percent. The Durbin Watson statistics of 1.93 indicates the presence of very little form of auto-correlation