The Impact of Life Insurance Allocation on Household Consumption Expenditure: Evidence from China

Minghao Chen, Yueling Xu, Bolin Zhu and Jiafeng Chen

SAGE Open, 2025, vol. 15, issue 3, 21582440251379059

Abstract: The social norm of “high savings, low consumption†has traditionally constrained the consumption ability of Chinese families. However, life insurance has become an essential component of household financial planning due to the increasing unpredictability of economic growth and rising demand for financial security. This study utilizes PLS-SEM and ANN models, grounded in an expanded Theory of Planned Behavior (TPB), to analyze the impact of life insurance on household consumption expenditures. Based on a survey of 505 Chinese families, the results indicate that life insurance provides both financial and psychological stability. This stability reduces households’ cautious saving tendencies, thereby promoting an increase in consumption expenditures.

Keywords: artificial neural network; life insurance; household consumption expenditure; TPB (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:15:y:2025:i:3:p:21582440251379059

DOI: 10.1177/21582440251379059

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