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Does childhood traumatic experience affect household life insurance demand in middle and older ages? Evidence from the 1959-1961 Great Chinese Famine

Does childhood traumatic experience affect household life insurance demand in middle and older... Childhood unexpected trauma casts a lifelong shadow on subsequent financial behaviours. The existing literature has mainly investigated stock or bond market participation, and few scholars focus on insurance decisions. Our paper enriches previous studies by testing the impact of childhood famine exposure on household life insurance demand in middle and older age groups. Using CHARLS, we discover that householders exposed to the 1959–1961 Great Chinese Famine as children were more inclined to own life insurance policies and pay higher premiums. Specifically, respondents who experienced the famine between 0–2 or 7–17 years old highly promoted their life insurance demand, whereas no statistically significant effects were observed for preschool famine experience. Additionally, women and people with three or more children were more likely to be influenced by the famine. Finally, risk and time preference were effective mediation factors, both channelling around 5% of the relationship. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Applied Economics Letters Taylor & Francis

Does childhood traumatic experience affect household life insurance demand in middle and older ages? Evidence from the 1959-1961 Great Chinese Famine

Applied Economics Letters , Volume OnlineFirst: 8 – May 4, 2023
8 pages

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References (11)

Publisher
Taylor & Francis
Copyright
© 2023 Informa UK Limited, trading as Taylor & Francis Group
ISSN
1466-4291
eISSN
1350-4851
DOI
10.1080/13504851.2023.2208830
Publisher site
See Article on Publisher Site

Abstract

Childhood unexpected trauma casts a lifelong shadow on subsequent financial behaviours. The existing literature has mainly investigated stock or bond market participation, and few scholars focus on insurance decisions. Our paper enriches previous studies by testing the impact of childhood famine exposure on household life insurance demand in middle and older age groups. Using CHARLS, we discover that householders exposed to the 1959–1961 Great Chinese Famine as children were more inclined to own life insurance policies and pay higher premiums. Specifically, respondents who experienced the famine between 0–2 or 7–17 years old highly promoted their life insurance demand, whereas no statistically significant effects were observed for preschool famine experience. Additionally, women and people with three or more children were more likely to be influenced by the famine. Finally, risk and time preference were effective mediation factors, both channelling around 5% of the relationship.

Journal

Applied Economics LettersTaylor & Francis

Published: May 4, 2023

Keywords: Life insurance demand; famine; middle and older ages; mediating effects; D91; D81; G14

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