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Buying control ? ‘Locus of control’ and the uptake of supplementary health insurance

Author

Listed:
  • Éric Bonsang

    (Legos - Laboratoire d'Economie et de Gestion des Organisations de Santé - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Joan Costa-Font

Abstract

This paper examines the relationship between locus of control (LOC) and the demand for supplementary health insurance (SUPP). Drawing on longitudinal data from Germany, we document robust evidence that individuals internal LOC increases the take up of supplementary private health insurance (SUPP). We find that the effect of one standard deviation increase in the measure of internal LOC on the probability of SUPP purchase is equivalent to a 14 percent increase in household income. Second, we find that the positive association between self-reported health and SUPP becomes small and insignificant when we control for LOC. These results suggest that LOC might be an unobserved individual trait that can partly explain previously documented evidence of advantageous selection into SUPP. Third, we find comparable results using data from Australia, which enhances the external validity of our results.

Suggested Citation

  • Éric Bonsang & Joan Costa-Font, 2022. "Buying control ? ‘Locus of control’ and the uptake of supplementary health insurance," Post-Print hal-03957231, HAL.
    • Handle: RePEc:hal:journl:hal-03957231
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    Cited by:

    1. Caliendo, Marco & Cobb-Clark, Deborah A. & Silva-Goncalves, Juliana & Uhlendorff, Arne, 2024. "Locus of control and the preference for agency," European Economic Review, Elsevier, vol. 165(C).
    2. Mesplé-Somps, Sandrine & Nilsson, Björn, 2023. "Role models, aspirations and desire to migrate," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 819-839.
    3. Andrew E Clark & Rong Zhu, 2024. "Taking Back Control? Quasi-Experimental Evidence on the Impact of Retirement on Locus of Control," The Economic Journal, Royal Economic Society, vol. 134(660), pages 1465-1493.
    4. Budría, Santiago & Betancourt-Odio, Alejandro & Wirth, Eszter, 2023. "Does internal locus of control get you out of homelessness?," Economics Letters, Elsevier, vol. 230(C).

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    Keywords

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    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving

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