PhD Lunch Seminars Rotterdam

Kim van Wilgenburg (Erasmus University Rotterdam)
Thursday, 11 August 2016

Voluntary health insurance enrolment is typically low in developing countries. This is puzzling given exposure to substantial medical expenditure risk and presumed high degrees of risk aversion among the poor. This paper examines the extent to which risk and time preferences can explain health insurance enrolment in the Philippines. In a nationwide survey we elicit risk preference parameters defined by prospect theory and time preferences defined by quasi-hyperbolic discounting. We find some evidence that lower discounting of the future predicts uptake of health insurance. But enrolment if not associated with risk preferences. We demonstrate that risk seeking individuals are more likely to smoke and drink alcohol regularly, which suggests that the negative result for health insurance is not simply attributable to measurement error in the estimated risk preferences.