IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v97y2014icp84-102.html
   My bibliography  Save this article

Social learning and health insurance enrollment: Evidence from China's New Cooperative Medical Scheme

Author

Listed:
  • Liu, Hong
  • Sun, Qi
  • Zhao, Zhong

Abstract

This paper examines the role of social learning in household enrollment decisions for the New Cooperative Medical Scheme (NCMS) in rural China by estimating a static game with incomplete information. Using a rich dataset from the China Health and Nutrition Survey, we find that a 10-percentage-point increase in the enrollment rate in a village increases one's take-up probability by 5 percentage points. Using multiple model specifications, we show that the estimated social effects are not driven by simultaneity or common unobserved factors but are consistent with the hypothesis of social learning. We also find that the importance of social effects decreases significantly with households’ familiarity with the NCMS as well as with the development of alternative information channels, which further ascertains that the primary mechanism for the social effects is social learning. The evidence suggests that healthier, wealthier, relatively well-educated, older Han male household heads tend to be opinion leaders.

Suggested Citation

  • Liu, Hong & Sun, Qi & Zhao, Zhong, 2014. "Social learning and health insurance enrollment: Evidence from China's New Cooperative Medical Scheme," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 84-102.
  • Handle: RePEc:eee:jeborg:v:97:y:2014:i:c:p:84-102 DOI: 10.1016/j.jebo.2013.10.012
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167268113002849
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Matzkin, Rosa L, 1992. "Nonparametric and Distribution-Free Estimation of the Binary Threshold Crossing and the Binary Choice Models," Econometrica, Econometric Society, vol. 60(2), pages 239-270, March.
    2. Ariel Pakes & Michael Ostrovsky & Steven Berry, 2007. "Simple estimators for the parameters of discrete dynamic games (with entry/exit examples)," RAND Journal of Economics, RAND Corporation, pages 373-399.
    3. Rust, John, 1987. "Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher," Econometrica, Econometric Society, vol. 55(5), pages 999-1033, September.
    4. Eiji Mangyo & Albert Park, 2011. "Relative Deprivation and Health: Which Reference Groups Matter?," Journal of Human Resources, University of Wisconsin Press, pages 459-481.
    5. 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, pages 1-19.
    6. Bajari, Patrick & Hong, Han & Krainer, John & Nekipelov, Denis, 2010. "Estimating Static Models of Strategic Interactions," Journal of Business & Economic Statistics, American Statistical Association, vol. 28(4), pages 469-482.
    7. Patrick Bajari & C. Lanier Benkard & Jonathan Levin, 2007. "Estimating Dynamic Models of Imperfect Competition," Econometrica, Econometric Society, pages 1331-1370.
    8. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Oxford University Press, vol. 60(3), pages 531-542.
    9. Foster, Andrew D & Rosenzweig, Mark R, 1995. "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1176-1209, December.
    10. Xueshan, Feng & Shenglan, Tang & Bloom, Gerald & Segall, Malcolm & Xingyuan, Gu, 1995. "Cooperative medical schemes in contemporary rural China," Social Science & Medicine, Elsevier, pages 1111-1118.
    11. Glaeser, Edward & Scheinkman, Jose & Shleifer, Andrei, 2003. "The injustice of inequality," Journal of Monetary Economics, Elsevier, pages 199-222.
    12. Gordon B. Dahl & Katrine V. L?ken & Magne Mogstad, 2014. "Peer Effects in Program Participation," American Economic Review, American Economic Association, pages 2049-2074.
    13. Shanjun Li & Yanyan Liu & Klaus Deininger, 2013. "How Important Are Endogenous Peer Effects In Group Lending? Estimating A Static Game Of Incomplete Information," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(5), pages 864-882, August.
    14. Anna Aizer, 2007. "Public Health Insurance, Program Take-Up, and Child Health," The Review of Economics and Statistics, MIT Press, pages 400-415.
    15. Yip, Winnie & Hsiao, William, 2009. "China's health care reform: A tentative assessment," China Economic Review, Elsevier, vol. 20(4), pages 613-619, December.
    16. Newey, Whitney K, 1994. "The Asymptotic Variance of Semiparametric Estimators," Econometrica, Econometric Society, pages 1349-1382.
    17. Krueger, Alan B. & Kuziemko, Ilyana, 2013. "The demand for health insurance among uninsured Americans: Results of a survey experiment and implications for policy," Journal of Health Economics, Elsevier, pages 780-793.
    18. repec:rje:randje:v:37:y:2006:i:4:p:929-945 is not listed on IDEAS
    19. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
    20. Munshi, Kaivan & Myaux, Jacques, 2006. "Social norms and the fertility transition," Journal of Development Economics, Elsevier, pages 1-38.
    21. Alan B. Krueger & Ilyana Kuziemko, 2011. "The Demand for Health Insurance among Uninsured Americans: Results of a Survey Experiment and Implications for Policy," Working Papers 1310, Princeton University, Department of Economics, Industrial Relations Section..
    22. Henrik Jacobsen Kleven & Wojciech Kopczuk, 2011. "Transfer Program Complexity and the Take-Up of Social Benefits," American Economic Journal: Economic Policy, American Economic Association, pages 54-90.
    23. Munshi, Kaivan, 2004. "Social learning in a heterogeneous population: technology diffusion in the Indian Green Revolution," Journal of Development Economics, Elsevier, pages 185-213.
    24. Edward L. Glaeser & Bruce I. Sacerdote & Jose A. Scheinkman, 2003. "The Social Multiplier," Journal of the European Economic Association, MIT Press, pages 345-353.
    25. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects and Welfare Cultures," The Quarterly Journal of Economics, Oxford University Press, pages 1019-1055.
    26. Harrison Hong & Jeffrey D. Kubik & Jeremy C. Stein, 2004. "Social Interaction and Stock-Market Participation," Journal of Finance, American Finance Association, vol. 59(1), pages 137-163, February.
    27. Marquis, M. Susan & Long, Stephen H., 1995. "Worker demand for health insurance in the non-group market," Journal of Health Economics, Elsevier, pages 47-63.
    28. Brown, Philip H. & Bulte, Erwin & Zhang, Xiaobo, 2011. "Positional spending and status seeking in rural China," Journal of Development Economics, Elsevier, pages 139-149.
    29. Jones-Smith, Jessica C. & Popkin, Barry M., 2010. "Understanding community context and adult health changes in China: Development of an urbanicity scale," Social Science & Medicine, Elsevier, pages 1436-1446.
    30. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," Journal of Economic Perspectives, American Economic Association, pages 115-136.
    31. Hong Wang & Winnie Yip & Licheng Zhang & William C. Hsiao, 2009. "The impact of rural mutual health care on health status: evaluation of a social experiment in rural China," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages 65-82, July.
    32. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, pages 1023-1035.
    33. Brown, Philip H. & Bulte, Erwin & Zhang, Xiaobo, 2011. "Positional spending and status seeking in rural China," Journal of Development Economics, Elsevier, pages 139-149.
    34. Esther Duflo & Emmanuel Saez, 2003. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," The Quarterly Journal of Economics, Oxford University Press, pages 815-842.
    35. Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 1998. "Learning from the Behavior of Others: Conformity, Fads, and Informational Cascades," Journal of Economic Perspectives, American Economic Association, pages 151-170.
    36. Hongbin Cai & Yuyu Chen & Hanming Fang, 2009. "Observational Learning: Evidence from a Randomized Natural Field Experiment," American Economic Review, American Economic Association, pages 864-882.
    37. Hongbin Cai & Yuyu Chen & Hanming Fang, 2009. "Observational Learning: Evidence from a Randomized Natural Field Experiment," American Economic Review, American Economic Association, pages 864-882.
    38. Duflo, Esther & Saez, Emmanuel, 2002. "Participation and investment decisions in a retirement plan: the influence of colleagues' choices," Journal of Public Economics, Elsevier, pages 121-148.
    39. Alan T. Sorensen, 2006. "Social learning and health plan choice," RAND Journal of Economics, RAND Corporation, pages 929-945.
    40. A. C. Cameron & P. K. Trivedi & Frank Milne & J. Piggott, 1988. "A Microeconometric Model of the Demand for Health Care and Health Insurance in Australia," Review of Economic Studies, Oxford University Press, vol. 55(1), pages 85-106.
    41. Gruber, J. & Poterba, J., 1994. "Tax Incentives and the Decision to Purchase Health Insurance: Evidence from the Self-Employed," Working papers 94-10, Massachusetts Institute of Technology (MIT), Department of Economics.
    42. Xiaoyan Lei & Wanchuan Lin, 2009. "The New Cooperative Medical Scheme in rural China: does more coverage mean more service and better health?," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages 25-46, July.
    43. Jonathan Gruber & James Poterba, 1994. "Tax Incentives and the Decision to Purchase Health Insurance: Evidence from the Self-Employed," The Quarterly Journal of Economics, Oxford University Press, pages 701-733.
    44. Victor Aguirregabiria & Pedro Mira, 2007. "Sequential Estimation of Dynamic Discrete Games," Econometrica, Econometric Society, vol. 75(1), pages 1-53, January.
    45. Taryn Dinkelman & Claudia Martínez A., 2014. "Investing in Schooling In Chile: The Role of Information about Financial Aid for Higher Education," The Review of Economics and Statistics, MIT Press, pages 244-257.
    46. Henrik Jacobsen Kleven & Wojciech Kopczuk, 2011. "Transfer Program Complexity and the Take-Up of Social Benefits," American Economic Journal: Economic Policy, American Economic Association, pages 54-90.
    47. 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, pages 1-19.
    48. Krueger, Alan B. & Kuziemko, Ilyana, 2013. "The demand for health insurance among uninsured Americans: Results of a survey experiment and implications for policy," Journal of Health Economics, Elsevier, pages 780-793.
    49. Victor Aguirregabiria & Pedro Mira, 2002. "Swapping the Nested Fixed Point Algorithm: A Class of Estimators for Discrete Markov Decision Models," Econometrica, Econometric Society, vol. 70(4), pages 1519-1543, July.
    50. Anna Aizer, 2007. "Public Health Insurance, Program Take-Up, and Child Health," The Review of Economics and Statistics, MIT Press, pages 400-415.
    51. Nair, Harikesh S. & Manchanda, Puneet & Bhatia, Tulikaa, 2006. "Asymmetric Peer Effects in Physician Prescription Behavior: The Role of Opinion Leaders," Research Papers 1970, Stanford University, Graduate School of Business.
    52. Jonathan Gruber & James M. Poterba, 1993. "Tax Incentives and the Decision to Purchase Health Insurance: Evidence from the Self-Employed," NBER Working Papers 4435, National Bureau of Economic Research, Inc.
    53. You, Xuedan & Kobayashi, Yasuki, 2009. "The new cooperative medical scheme in China," Health Policy, Elsevier, vol. 91(1), pages 1-9, June.
    54. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, pages 797-817.
    55. White, Halbert, 1982. "Maximum Likelihood Estimation of Misspecified Models," Econometrica, Econometric Society, vol. 50(1), pages 1-25, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wagner, Peter A., 2018. "Who goes first? Strategic delay under information asymmetry," Theoretical Economics, Econometric Society.
    2. Liu, Hong & Zhao, Zhong, 2014. "Does health insurance matter? Evidence from China’s urban resident basic medical insurance," Journal of Comparative Economics, Elsevier, pages 1007-1020.
    3. Lingguo Cheng & Hong Liu & Ye Zhang & Zhong Zhao, 2018. "The heterogeneous impact of pension income on elderly living arrangements: evidence from China’s new rural pension scheme," Journal of Population Economics, Springer;European Society for Population Economics, pages 155-192.
    4. Wagner, Peter, 2015. "Who goes first? Strategic Delay and Learning by Waiting," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 500, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

    More about this item

    Keywords

    Rural China; Health insurance; Social learning; Peer effects;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:97:y:2014:i:c:p:84-102. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/jebo .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.