American Journal of Applied Sciences

A Multinomial Logit Based Evaluation of the Behavior of the Life Insureds in Romania

Cristian Dragos and Simona Dragos

DOI : 10.3844/ajassp.2009.124.129

American Journal of Applied Sciences

Volume 6, Issue 1

Pages 124-129


The Romanian life insurance market is in full expansion. There exists competition between insurance companies as well as between different products of the same company. In this article we describe a study using data that we collected from clients of a Romanian insurance company. We have observed two types of variables: attributes of the insurance products (e.g., profitability, risk), as well as characteristics of the individuals (e.g., sex, age, income). Using elements of economic theory and a multinomial logit model we explain the behavior of the life insureds. We estimate the variations in the market shares of life insurance products using marginal effects. The variations are due to possible changes in the values of some attributes or characteristics.


© 2009 Cristian Dragos and Simona Dragos. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.