Heterogeneous Preferences for Micro Health Insurance Attributes in Rural Cambodia: Latent Class Analysis

Hiroki Wakamatsu (), Seiichi Fukui () and Kana Miwa ()
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Hiroki Wakamatsu: Fisheries Research and Education Agency
Seiichi Fukui: Osaka Sangyo University
Kana Miwa: Kushiro Public University of Economics

Economics Bulletin, 2019, vol. 39, issue 4, 2963-2975

Abstract: This study estimates the heterogeneous preferences and willingness-to-pay (WTP) of potential clients for different attributes of micro health insurance (MHI) and to seek a more acceptable insurance scheme in rural Cambodia. A latent class model is employed to treat with heterogeneity of consumer preferences, and found a two-class model as the best model, where one of the two classes is responsive to improvement of micro health insurance scheme. In the comparison of the two classes, the second class, comprising household heads who were younger and well-educated, with more remittances from migrant family members, more assets, and facing more illness, was significantly responsive to improvement in the insurance schemes. As for present time bias, we could not find any evidence that supports the hypothesis that it negatively affects WTP for MHI. In addition, our findings suggest that potential insurance customers who would have purchased MHI accounted for more than 60% in our study area, Thus, our results can be used to support improvements in existing MHI to attract more MHI customers.

Keywords: Consumer preference; micro health insurance; developing countries; Cambodia (search for similar items in EconPapers)
JEL-codes: I3 O1 (search for similar items in EconPapers)
Date: 2019-12-24
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