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

Eric Bonsang and Joan Costa-Font

Journal of Economic Behavior & Organization, 2022, vol. 204, issue C, 476-489

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 suggest 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: D15 I12 I13 I18 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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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 (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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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:204:y:2022:i:c:p:476-489

DOI: 10.1016/j.jebo.2022.10.035

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