Buying Control? 'Locus of Control' and the Uptake of Supplementary Health Insurance

Eric Bonsang, Joan Costa-Font and Sonja de New

No 14633, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper analyses the relationship between locus of control (LOC) and the demand for supplementary health insurance. Drawing on longitudinal data from Germany, we find robust evidence that individuals having an internal LOC are more likely to take up supplementary private health insurance (SUPP). The increase in the probability to have a SUPP due to one standard deviation increase in the measure of internal LOC is equivalent to an increase in household income by 14 percent. Second, we find that the positive association between selfreported health and SUPP becomes small and insignificant when we control for LOC, suggesting that LOC might be an unobserved individual trait that can explain advantageous selection into SUPP. Third, we find comparable results using data from Australia, which enhances the external validity of our results.

Keywords: Germany; supplementary insurance; private health insurance; risk aversion; health care use; locus of control; positive selection; Australia (search for similar items in EconPapers)
JEL-codes: D15 I18 (search for similar items in EconPapers)
Pages: 81 pages
Date: 2021-08
New Economics Papers: this item is included in nep-hea, nep-ias and nep-isf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - published in: Journal of Economic Behaviour and Organisation , 2022, 204, 466 - 489

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Related works:
Journal Article: 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 (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)
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