On the Impact of Insurance on Households Susceptible to Random Proportional Losses: An Analysis of Poverty Trapping

Kira Henshaw, Jorge Ramirez, José Miguel Flores-Contró +3

The trapping probability, $\ddot{I}ˆ$, as defined in Kovacevic and Pflug (2011), is modelled by assuming proportional capital losses, both in the case where there is no insurance and in t…