Stated preferences and actual choices in german health insurance

Anna Werbeck

No 1091, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Hypothetical bias is the discrepancy between stated preferences and actual choices. As such, it is one of the key issues regarding the use of hypothetical survey methods and therefore highly relevant for economists in understanding human behavior and refining policy interventions. Hypothetical survey methods are often used to inform our view on decision making in health and financial settings. However, there is limited understanding of the extent and underlying factors of hypothetical bias within the context of health insurance. This study contributes to this understanding and explores the extent of hypothetical bias and its correlation with personality traits and behavioral patterns in a health insurance setting. Using large-scale survey data in tandem with detailed information on health plans, I show that the majority of enrollees overestimate their willingness to switch health plans when facing a price increase: 64% show hypothetical bias. Especially conscientious, impulsive or negative reciprocal individuals are prone to hypothetical bias. In contrast, internal locus of control correlates with consistent preferences. These findings can help refine mitigation strategies and assess the reliability of stated preferences.

Keywords: Behavioral; hypothetical bias; finance; health insurance (search for similar items in EconPapers)
JEL-codes: D91 G40 I13 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-dcm
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:300648

DOI: 10.4419/96973268

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