Risk tolerance influences insurance coverage more than risk occurrence in markets.
The article explores why some people with lower risk levels have more insurance coverage than those with higher risk levels. By considering people's risk tolerance in addition to their risk level, the researchers found that individuals who take more risks or don't take steps to reduce risks are less likely to have various types of insurance. This preference effect can lead to different patterns of insurance coverage in different markets, with lower risk individuals buying more insurance in some markets and higher risk individuals buying more in others.