Tobit analysis is used to analyze the impact of household characteristics on demand for total insurance. This approach examines the marginal change in demand for insurance, as well as the change in the probability of purchasing insurance. Demand effects are dominated by the marginal impacts from existing purchasers of insurance. Although income and number of earners are both positively related to the demand for insurance, the marginal effect from an increase in income is greater for single-earner households than for multiearner households. Also, as either family size or age increases, the marginal increase in insurance expenditure diminishes.
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Showers et al. (1994) studied this question.
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