The Experimental Economics Method to Examine Education Insurance on Syariah and Convensional System

Abstract

Experimental Economics is one way to collect data instead of common happenstance data. Experimental economics studies deal with mimicking market behaviour with reward s as the main instrument. An environment is created so that the response changes can be observed. This research aims applying the experimental method to compare two system of Insurance, which are syariah and conventional systems. There is risk to share with in insurance system. The insurance company takes all of the risk in conventional system while the customers take the responsible too in syariah system. It also concerns ages for death risk included , that’s why in this research, age is one of the factors to be observed of besides the system. 25 and 40 years old represent the age of customers who take education insurance product. The experiment took place in November 2005. The result shows that customers with 40 years old age give more premium than customers with 25 years old age. Average profit of 25 years old customers in syariah system is higher than in conventional system. At 40 years old the average profit of customers seems to be the same. Average pro fit of the company with conventional system is always higher compares to syariah system, in both ages of customers. The result of experiment with the choice shows that, without knowing what insurance system’s name they have taken, the customers tend to choose syariah system.