Family ties and commercial health insurance consumption in China

Studying the factors that influence commercial health insurance consumption is essential in insurance economics. Family ties are important factors that affect consumer behaviour, especially in Eastern countries such as China. We construct an index to measure family ties and examine their effect on commercial health insurance consumption. We also use an instrumental variable approach to address endogeneity and apply a complementary log–log regression to deal with rare-event bias. We find that family ties have significantly positive impacts on individuals’ and families’ commercial health insurance consumption. The effect of family ties on commercial health insurance consumption is greater in individuals/families with higher income levels, those in eastern provinces, and those who are older.