Towards an Endogenous Theory of Insurance Demand in Sub-Saharan Africa: Insights from Nigeria

This dissertation advances an endogenous theory of insurance demand specifically applicable to sub-Saharan African contexts, using Nigeria as the primary empirical grounding. Dominant theoretical models of insurance demand, rooted in expected utility theory and information economics, treat insurance demand as determined by exogenous risk exposures and individual rationality assumptions that do not capture the socially embedded, institutionally constrained, and culturally modulated insurance decision processes prevalent in African settings. This study proposes an Embedded Insurance Demand Theory (EIDT) that integrates behavioral economics, social capital theory, institutional theory, and cultural cognition theory into a coherent demand framework specific to low-income, high-informality African environments. The EIDT is formalized mathematically and empirically tested using a three-wave panel survey of 1,200 households across six geopolitical zones of Nigeria, capturing insurance demand evolution over 36 months. Structural equation modeling with latent growth curve analysis tests hypothesized pathways between institutional trust evolution, social norm shifts, income trajectories, and insurance adoption. Instrumental variable approaches address reverse causality concerns. The study makes three original theoretical contributions: a formal model of institutional trust as an insurance demand shifter, a social contagion mechanism for insurance adoption, and a cultural cognition typology for African insurance markets. Keywords: Insurance Demand Theory, Sub-Saharan Africa, Nigeria, Behavioral Economics, Endogenous Theory.