Only words matter? The effects of cognitive abilities on commercial insurance participation

Tingting Zhang, Wenquan Li, Kaixin Li and Zhifeng Liu

The North American Journal of Economics and Finance, 2022, vol. 61, issue C

Abstract: We examine the relationship between cognitive abilities and commercial insurance participation. Using data from the Chinese Family Panel Study, we find that average cognitive ability has a significantly positive impact on commercial insurance participation. However, this influence comes mainly from literacy ability, indicating that the literal meaning of the words plays a major role. Additionally, trust level can also affect the impacts of cognitive abilities on commercial insurance participation. Specifically, residents with lower trust levels are less likely to use their cognitive abilities to process information and make commercial insurance purchasing decisions. Moreover, we identify the supplementary effect of economic and managerial knowledge on cognitive abilities.

Keywords: Cognitive ability; Insurance participation; Information; Trust (search for similar items in EconPapers)
JEL-codes: D14 G11 G22 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:61:y:2022:i:c:s1062940822000468

DOI: 10.1016/j.najef.2022.101691

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