Does supplemental private health insurance incentivize household risky financial asset investment? Evidence from the China Household Financial Survey

Si Shi and Yawen Jiang
Additional contact information
Si Shi: Sun Yat-Sen University

International Journal of Health Economics and Management, 2022, vol. 22, issue 4, No 2, 369-421

Abstract: Abstract Private health insurance (PHI) is considered a supplement to public medical insurance schemes in China. To the extent that PHI coverage may offset background risk by decreasing medical expenditure risk, it may also incentivize risky financial behaviors. However, empirical evidence confirming this theory is absent in China. We fill this void by examining the impact of supplemental PHI on household risky financial investment using data from the China Household Financial Survey (CHFS). In the first set of analyses, we used bivariate probit (BVP) models with instrumental variables (IVs) to examine the effects of PHI on the extensive margin of household risky financial investment. In the second set of analyses, we used Tobit models with a two-stage residual inclusion (2SRI) framework to examine the effects of PHI on the corresponding intensive margin. The results indicated that supplemental PHI increased the probability of holding risky financial assets. On top of that, PHI increased the percentage of total financial assets allocated to risky financial investment. Such effects were more pronounced on stocks than on other risky products. Our findings provided evidence that purchasing supplemental PHI in China may increase the risk tolerance of financial investment, and risk attitude is a mediating factor between PHI ownership and risky financial investment behavior.

Keywords: Private health insurance; Stock; Risky financial investment; Background risk; China (search for similar items in EconPapers)
JEL-codes: G11 I13 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10754-022-09326-9 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:ijhcfe:v:22:y:2022:i:4:d:10.1007_s10754-022-09326-9

Ordering information: This journal article can be ordered from
http://www.springer. ... th/journal/10754/PS2

DOI: 10.1007/s10754-022-09326-9

Access Statistics for this article

International Journal of Health Economics and Management is currently edited by Leemore Dafny, Robert Town, Mark Pauly, David Dranove and Pedro Pita Barros

More articles in International Journal of Health Economics and Management from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().