Alternative Micro‐Health Insurance and Heterogeneous Preferences: A Discrete Choice Experiment in Rural Cambodia

Hiroki Wakamatsu and Seiichi Fukui

Review of Development Economics, 2026, vol. 30, issue 2, 1074-1087

Abstract: Micro‐health insurance (MHI) alleviates the impact of poor health and injuries, complementing the existing informal risk‐coping mechanisms for impoverished households in developing nations. In rural Cambodia, the take‐up rates for such schemes are generally low. This study applies a mixed logit model to evaluate the demand among potential customers for MHI attributes and identify more acceptable insurance schemes for rural Cambodia. We found that adding non‐existing benefits, management services, and additional medical providers to the previous MHI scheme would considerably increase the willingness to pay (WTP) of potential insurance customers. However, the implementation costs of the alternative scheme were higher than the WTPs for the MHI. Additionally, we observed that participation in the village‐saving loan association, expected to act as an insurance substitute by enforcing precautionary saving and strengthening solidarity among members, had a negative effect on WTP for MHI. Policy implications from our findings are: changing the existing village‐saving group from insurance substitutes to insurance complements by interlinking insurance, credit, and savings could effectively increase the WTP for MHI and that appropriate marketing tools should be devised that induce potential insurance purchasers to change their reference points from the status quo before purchasing MHI for their final wealth.

Date: 2026
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