Out of time? The effect of an infrequent traumatic event on individuals’ time and risk preferences, beliefs, and insurance purchasing

Ori Shai

Journal of Health Economics, 2022, vol. 86, issue C

Abstract: This study examines the effect on time preferences and the purchase of insurance by persons closely acquainted with someone who was in danger of physical injury (trauma) during Israel's military operation in the Gaza Strip in 2014. To this end, I use panel data to track the same individuals before and after the trauma. My results reveal that experiencing trauma increases individuals’ purchases of insurance, and in particular supplementary health and long-term care insurance. Investigating the mechanisms behind the results, I find that people become more future-oriented after someone close to them was in danger of physical injury during that military operation. However, I cannot completely rule out other causes such as an increase in risk aversion or changes in individuals’ beliefs.

Keywords: War; Time preferences; Insurance (search for similar items in EconPapers)
JEL-codes: D74 D91 G22 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:86:y:2022:i:c:s0167629622000935

DOI: 10.1016/j.jhealeco.2022.102678

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