The role of life experience in long-term care insurance decisions

Sharon Tennyson and Hae Kyung Yang

Journal of Economic Psychology, 2014, vol. 42, issue C, 175-188

Abstract: This study uses data from a unique survey of the retirement planning behaviors of late middle-aged individuals living in New York State, to test hypotheses regarding the role of earlier life experiences on the demand for long-term care insurance. Our primary focus is on previous provision of informal long-term care, which some studies have found to be correlated with demand for long-term care insurance. We add to the literature by providing a test for causal relationships between previous care-giving and insurance demand, and by exploring the more generally the mechanisms through which previous life experiences are linked to insurance demand. Results are robust to a variety of empirical specifications and estimation methods, including consideration of current care-giving roles and endogenous selection into previous care-giving, and strongly support a causal relationship between previous long-term care-giving and demand for insurance. Our estimates also provide evidence that lifetime health trajectories and family relationships are associated with long-term care insurance demand, and suggest that both emotional and informational forces influence demand.

Keywords: Long-term care; Private long-term care insurance; Informal care-giving; Insurance purchase intention; Emotions and insurance purchase (search for similar items in EconPapers)
JEL-codes: D03 D12 I11 I13 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:42:y:2014:i:c:p:175-188

DOI: 10.1016/j.joep.2014.04.002

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