PERFORMANCE OF THE EXPECTED UTILITY METHOD AND TWO OTHER NORMATIVE METHODS IN INSURANCE DECISION MAKING*

In an experiment, thirty-six professional insurance men employed the utility method, the worry method, and the comparison method in two insurance problems to determine the appropriate insurance coverage. It was found that the best act with the utility method almost always was no insurance, whereas the best act with the other two methods tended to be complete insurance. The utility method best act rarely agreed with the subject's actual preferred act, while the comparison method best act usually was the same or almost the same as the actual preferred act. While the worry method suggests that the subjects typically are risk averse, the utility functions obtained tend to show that the subjects typically are not risk averse.     

Information theory and risk in capital markets

The present empirical study applies the methodology of information theory to the problem of assessing and separating capital market risk, which is separated into its systematic and unsystematic components. Monthly return relatives for all securities traded on the New York Stock Exchange are examined for the period 1926 to 1971, which is segmented into six 7-year subperiods. The securities are combined into portfolios of various sizes and ranked. It is concluded that although both systematic and unsystematic risks have increased over the 45-year interval—particularly between the pre-1940 and post-1940 periods—they have maintained their relative share of the total risk over the same period.     

Understanding changes in Māori incomes and income inequality 1997–2003

This paper examines recent changes in weekly income levels and dispersion for Māori, New Zealand’s indigenous ethnic group. Changes in the Māori income distribution between 1997 and 2003 reflect rapid increases in economic growth and employment rate. A reduced proportion of people had zero or benefit-level incomes and a higher proportion had high incomes. Income inequality declined for working-aged Māori and was stable for employed Māori. The average income gap between Māori and Europeans declined. The increased Māori employment rate during this period was the single most important driver of changes in the Māori income distribution.

New Environmental Theories: Toward a Coherent Theory of Environmentally Significant Behavior

This article develops a conceptual framework for advancing theories of environmentally significant individual behavior and reports on the attempts of the author's research group and others to develop such a theory. It discusses definitions of environmentally significant behavior; classifies the behaviors and their causes; assesses theories of environmentalism, focusingespecially on value-belief-norm theory; evaluates the relationship between environmental concern and behavior; and summarizes evidence on the factors that determine environmentally significant behaviors and that can effectively alter them. The article concludes by presenting some major propositions supported by available research and some principles for guiding future research and informing the design of behavioral programs for environmental protection.     

Estimating chance reproducibility in Guttman Scaling

A definition of reproducibility in Guttman Scaling and two chance measures of reproducibility are suggested. The first measure assumes that the items are independent. The second method assumes nonindependent items and fits respondent and item margins by an iterative method used in fitting log-linear models. Chance reproducibility is conceptualized in terms of assumptions about respondent variability.