Abstract
Using panel data from the 2013, 2015 and 2017 China Household Finance Survey (CHFS) and the digital finance index developed by Peking University, this study examines the impact of digital finance on household insurance purchases and explores its mechanisms. The results indicate that digital finance can promote household insurance purchases by increasing residents’ financial literacy and their accessibility to internet financial services. A heterogeneity analysis reveals that digital finance has a more positive effect on the insurance purchases of households with fewer assets, lower income and located in less developed and rural areas. Regarding the type of insurance, digital finance enhances the purchase of property and life rather than health insurance. The regression results of household insurance purchases on the three dimensions of digital finance show that the breadth of coverage and depth of usage of digital finance have more significant impacts on household insurance purchases than digitalisation level. Robustness checks with different measures and samples, also addressing potential endogeneity using the instrumental variable approach, show the reliability of our findings.
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06 June 2022
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Notes
The data are obtained from the Statistical Bulletin of National Economic and Social Development of China (2020) issued by the Statistics Bureau of China.
The data are obtained from the China Insurance Yearbook (2020).
Question 1: Suppose that the annual interest rate of the bank is 4%. If CNY 100 is deposited for a fixed period of one year, what is the principal and interest after one year? Options: (1) less than CNY 104, (2) more than CNY 104, (3) equal to CNY 104, (4) unable to calculate.
Question 2: Suppose that the annual interest rate of the bank is 5% and the annual inflation rate is 3%. What can you buy after saving CNY 100 in the bank for one year? Options: (1) less than one year ago, (2) more than one year ago, (3) the sane as one year ago, (4) unable to calculate.
In your opinion, generally speaking, which one is riskier? Options: (1) stock, (2) fund, (3) don’t know stock, (4) don’t know stock fund, (5) don’t know either.
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Acknowledgements
**ao Hu would like to acknowledge the financial support from the National Natural Science Foundation of China (No. 72002175) and the Science and Technology Plan of Sichuan Province (No. 21RKX0766). Jun Liu would like to acknowledge the financial support from the Fundamental Research Funds for the Central Universities (No. 2020JJ006) and the Bei**g Social Science Foundation (No. 20GLC046).
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Hu, X., Wang, Z. & Liu, J. The impact of digital finance on household insurance purchases: evidence from micro data in China. Geneva Pap Risk Insur Issues Pract 47, 538–568 (2022). https://doi.org/10.1057/s41288-022-00267-5
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DOI: https://doi.org/10.1057/s41288-022-00267-5