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Superstition and farmers’ life insurance spending

Author

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  • Liu, Yun
  • Zhang, Yifei
  • Chen, Xin
  • Yang, Yuxin

Abstract

Superstition is prevalent in rural areas, yet very few studies examine whether it affects rural households’ economic decisions. In this paper, we investigate the impact of “zodiac year” superstition on Chinese rural households’ life insurance spending. We find a statistically significant 18.5% increase in life insurance expenditure during the head’s zodiac year. Such a boost is only significant in the zodiac year and does not exist in non-zodiac years. Our study provides novel evidence that rural households would hedge “bad luck” by self-insurance when bearing superstitious beliefs.

Suggested Citation

  • Liu, Yun & Zhang, Yifei & Chen, Xin & Yang, Yuxin, 2021. "Superstition and farmers’ life insurance spending," Economics Letters, Elsevier, vol. 206(C).
    • Handle: RePEc:eee:ecolet:v:206:y:2021:i:c:s0165176521002524
    DOI: 10.1016/j.econlet.2021.109975
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    References listed on IDEAS

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    1. Wagstaff, Adam & Lindelow, Magnus & Jun, Gao & Ling, Xu & Juncheng, Qian, 2009. "Extending health insurance to the rural population: An impact evaluation of China's new cooperative medical scheme," Journal of Health Economics, Elsevier, vol. 28(1), pages 1-19, January.
    2. Nancy Qian, 2008. "Missing Women and the Price of Tea in China: The Effect of Sex-Specific Earnings on Sex Imbalance," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(3), pages 1251-1285.
    3. Shum, Matthew & Sun, Wei & Ye, Guangliang, 2014. "Superstition and “lucky” apartments: Evidence from transaction-level data," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 109-117.
    4. Jia He & Haoming Liu & Tien Foo Sing & Changcheng Song & Wei-Kang Wong, 2020. "Superstition, Conspicuous Spending, and Housing Market: Evidence from Singapore," Management Science, INFORMS, vol. 66(2), pages 783-804, February.
    5. Ali Asgary & Ken Willis & Ali Taghvaei & Mojtaba Rafeian, 2004. "Estimating rural households’ willingness to pay for health insurance," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 5(3), pages 209-215, September.
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    Cited by:

    1. Wu, Nan & Zhang, Xiaomeng & Zhou, Wenyu, 2023. "The impacts of superstition on risk preferences and beliefs: Evidence from the Chinese zodiac year," China Economic Review, Elsevier, vol. 81(C).

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    More about this item

    Keywords

    Superstition; Insurance; Rural household;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G52 - Financial Economics - - Household Finance - - - Insurance
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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