Buying control? ‘Locus of control’ and the uptake of supplementary health insurance

Eric Bonsang and Joan Costa-Font

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper examines the relationship between locus of control (LOC) and the demand for supplementary health insurance (SUPP). Drawing on longitudinal data from Germany, we document robust evidence that individuals internal LOC increases the take up of supplementary private health insurance (SUPP). We find that the effect of one standard deviation increase in the measure of internal LOC on the probability of SUPP purchase is equivalent to a 14 percent increase in household income. Second, we find that the positive association between self-reported health and SUPP becomes small and insignificant when we control for LOC These results suggests that LOC might be an unobserved individual trait that can partly explain previously documented evidence of advantageous selection into SUPP. Third, we find comparable results using data from Australia, which enhances the external validity of our results.

Keywords: private health insurance; health care use; risk aversion; locus of control; positive selection; supplementary insurance; Germany; Australia (search for similar items in EconPapers)
JEL-codes: I12 I18 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2022-12-01
New Economics Papers: this item is included in nep-eur, nep-hea and nep-neu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in Journal of Economic Behavior & Organization, 1, December, 2022, 204, pp. 476 - 489. ISSN: 0167-2681

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http://eprints.lse.ac.uk/117144/ Open access version. (application/pdf)

Related works:
Journal Article: Buying control? ‘Locus of control’ and the uptake of supplementary health insurance (2022)
Working Paper: Buying control ? ‘Locus of control’ and the uptake of supplementary health insurance (2022)
Working Paper: Buying Control? ‘Locus of Control’ and the Uptake of Supplementary Health Insurance (2021)
Working Paper: Buying Control? 'Locus of Control' and the Uptake of Supplementary Health Insurance (2021)
Working Paper: Buying Control? 'Locus of Control' and the Uptake of Supplementary Health Insurance (2021)
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