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The effects of medical insurance on durables consumption in rural China

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  • Meiling Ying
  • Zaichao Du

Abstract

Purpose - The New Rural Cooperative Medical Scheme (NRCMS), implemented in China since 2003, has greatly increased the access of the poor to health services and alleviated the hardship caused by catastrophic medical payments. Both the precautionary saving theory and the Buffer‐Stock saving theory would predict a positive effect of this event on consumption. The purpose of this paper is to empirically study the effects of medical insurance on durables consumption in rural China. Design/methodology/approach - Using China Health and Nutrition Survey (CHNS) data, the authors study the effects of medical insurance on durable goods consumption in rural China through a panel binary choice model. Findings - It is found that households with medical insurance have a significantly higher level of durables consumption, and their probabilities of purchasing durables increase by 2.0 per cent‐4.4 per cent, which support the precautionary saving theory and the Buffer‐Stock saving theory. Originality/value - Unlike previous studies, the authors focus on the effects of medical insurance on the consumption of durables, which have a big weight in household wealth and are more sensitive to income uncertainty.

Suggested Citation

  • Meiling Ying & Zaichao Du, 2012. "The effects of medical insurance on durables consumption in rural China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 4(2), pages 176-187, May.
    • Handle: RePEc:eme:caerpp:v:4:y:2012:i:2:p:176-187
    DOI: 10.1108/17561371211224764
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    References listed on IDEAS

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    Cited by:

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    2. Si Shi & Yawen Jiang, 2022. "Does supplemental private health insurance incentivize household risky financial asset investment? Evidence from the China Household Financial Survey," International Journal of Health Economics and Management, Springer, vol. 22(4), pages 369-421, December.
    3. Fang, Xiangming & Jing, Ruiwei & Zeng, Guang & Linnan, Huan Wan & Zhu, Xu & Linnan, Michael, 2014. "Socioeconomic status and the incidence of child injuries in China," Social Science & Medicine, Elsevier, vol. 102(C), pages 33-40.
    4. Zhao Rong & Lan Wu, 2020. "Withholding Consumption: A Free Riding Perspective on the Diffusion of Color Television in Rural China," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(2), pages 489-516, June.

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