1. ¹Lecturer in Economics, Bradford University School of Management, Emm Lane, Bradford, West Yorkshire, United Kingdom BD9 4JL
2. ²Associate Professor of Finance, School of Commerce, University of Adelaide

^*The authors wish to thank Anatoly Kiriviesky and the anonymous referees for their helpful comments and advice.

Abstract

This paper investigates the determinants of consumption for one of the fastest growing financial products in Asia. We find evidence that increased provision of civil rights and political stability leads to an increase in life insurance provision. However, by utilizing various estimation procedures, a number of differences between the more developed insurance markets and those in Asia are illustrated. In particular, the estimated income effect is found to be far higher in Asia than in other countries. However, the size of this difference is reduced once political and legal factors are controlled for, suggesting that future insurance market growth in Asia may not exceed that in the rest of the world.