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Abstract Purpose: The insurance industry in Mongolia is indeed expanding, though it has received comparatively less attention than other sectors within the financial industry. However, it is crucial to understand the factors that reflect and influence long-run development trends of the insurance industry, in order to actively work towards its growth and development in the future. This study examines the variables in terms of their long-run effects on the insurance industry in Mongolia. Study design/methodology/approach: Data are sourced from the World Bank’s databases. Spanning the period from 1995 to 2022, with a total of 28 observations. Johansen Cointegration rank tests, estimation of cointegrating vector, and testing of hypotheses on long-run coefficients are used to investigate the long- run relationship between insurance premiums and variables that drive them. Findings: Our results show that price level, internet usage, and household income are the long-run variables influencing the total amount of insurance premiums in Mongolia. The long-run coefficients of these variables determine the long-run elasticities of insurance premiums. The long-run coefficient of household income is the largest and then household income is the primary factor of insurance premiums. Also, life expectancy is excluded from the cointegrating relation because zero restriction on its coefficient cannot be rejected. The role of life expectancy is ambiguous and is needed for further investigation. Practical Implications: Based on the main results, it is imperative to focus on long-run factors influencing the aggregate insurance premium income in Mongolia. Consequently, our findings offer valuable perceptions for the insurance sector, shedding light on their influence on the development of the industry. The development of the insurance industry in Mongolia is full of challenges and uncertainties. Hence, our study is related to the practice of decision sciences, providing insights into decision-making processes in optimal ways under conditions of uncertainty faced by government officials and practitioners.
Inefficiencies and high costs characterize Mongolia's social welfare system, and its effectiveness in reducing poverty was hampered by the fact that many services were offered without considering individual or household living standards. The set of public interventions aimed at supporting the poorer and more vulnerable members of society, as well as helping individuals, families, and communities manage risk. We have analyzed the current state of social protection programs in Mongolia . Also, this study was conducted based on documents and statistics on about the major challenges in social protection policy changes.
Cognitive ability is increasingly recognized as a significant factor influencing household portfolio decisions. However, different cognitive abilities, such as numeracy, fluency, and recall, may yield different investment results. The aim of this paper is to empirically examine the associations of three cognitive abilities (numeracy, fluency, and recall) with household portfolio composition using Survey of Health, Aging, and Retirement (SHARE) data across 16 European countries and the multinomial logit model. Our empirical analyses focus on the impacts of differences in country characteristics, specifically the level of economic development and the existence of a national health system (NHS). The results indicate that numeracy and fluency have positive impacts on the decision to hold safe and relatively risky assets, as well as fully diversified portfolios, in economically developed countries, but have no significant effects in emerging countries. Additionally, all three cognitive abilities positively influence the decision to hold fully diversified portfolios in countries with NHS, while no significant effects are observed in countries without NHS. Our findings reveal a decreased impact of cognitive abilities on portfolio types in emerging countries and non-NHS countries. Notably, a significant and positive correlation is found between the holding of no financial assets in both non-NHS countries and advanced countries. One important implication of this study is that marketing strategies of financial advisors should take into account household cognitive abilities, as well as differences in economic development among countries and the presence or absence of NHS.
This paper investigates the effects of risk aversion on portfolio choices in terms of life insurance purchase and risky asset investment. The theoretical results show that households with very low degree of risk aversion allocate all of their investments to risky assets and have little desire to buy life insurance and risk-free bonds. When the degree of risk aversion exceeds a threshold value, the household leaves the risky asset market and only invests in life insurance and risk-free bonds. Based on data from the Survey of Health, Aging and Retirement in Europe (SHARE) for Wave 4, our empirical results are basically in accord with the theoretical findings. Moreover, we find that healthier households (with a normal BMI and more physical activities) tend to invest in risky assets, implying that health status may serve as an observable (inverse) indicator of risk aversion
Purpose: The exchange rate is a relative price and represents the value of the national currency against other currencies. Exchange rate fluctuations have impact on both macroeconomy and microeconomy. Due to Mongolia`s dependance on the mining and import prices, local and foreign firms carefully monitor exchange rate movements in Mongolia to reduce their risk. Large movements in resource prices affect Mongolian economy, especially exchange rates. Various factors affect the exchange rates, such as interest rates, money supply, inflation, and balance of payments in long-run, while expectations and behavior of market participants in short-term. When behavior of foreign exchange market participants forms a common decision pattern, it can lead to herding behavior. This study examines the herding behavior in the Mongolian foreign exchange market under normal circumstances, during market ups and downs, and during economic crisis. Methodology: We applied the return dispersion models (CSAD, CSSD) to investigate herding behavior in the foreign exchange market of Mongolia by examining exchange rate data of totally 12 currencies. The sample period is from January 3, 2006 to January 20, 2021. The data were obtained from Bank of Mongolia's database. Findings: According to the empirical results this study confirms herding behavior in the foreign exchange market of Mongolia. Thus, all hypotheses were accepted. Significance: This study is among the first to examine the presence of herd behavior in the foreign exchange market using four different hypotheses.
Abstract The aim of this study is to examine the relationship between two types of cognitive abilities (numeracy and recall) and life insurance holdings in European countries. Households with better numeracy and recall are more likely to own life insurance. Interaction efects indicate a higher level of education decreases the positive efect of numeracy on life insurance holdings and increases the positive efect of recall on life insurance holdings. Multinomial regressions indicate that recall has a positive impact on the decisions to hold term life, whole life, and both term and whole life insurance policies and a negative impact on the decision not to hold any type of life insurance policy. We also fnd that recall has a greater impact on the decision to own term life policies than on the decision to own whole life (both term and whole life) policies. One possible reason is whole life policies consist of many options that are difcult to comprehend even with higher cognitive abilities. One implication of this study is marketing by life insurers should take into account household cognitive abilities.
