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

Bonsang, Eric and Costa-Font, Joan ORCID: 0000-0001-7174-7919 (2022) Buying control? ‘Locus of control’ and the uptake of supplementary health insurance. Journal of Economic Behavior & Organization, 204. 476 - 489. ISSN 0167-2681

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Identification Number: 10.1016/j.jebo.2022.10.035


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 suggests 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.

Item Type: Article
Official URL:
Additional Information: © 2022 The Authors
Divisions: Health Policy
Subjects: R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine
H Social Sciences
JEL classification: I - Health, Education, and Welfare > I1 - Health > I12 - Health Production: Nutrition, Mortality, Morbidity, Suicide, Substance Abuse and Addiction, Disability, and Economic Behavior
I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy; Regulation; Public Health
Date Deposited: 21 Oct 2022 09:45
Last Modified: 23 Nov 2022 10:03

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