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Precautionary Saving and Health Insurance: A Portfolio Choice Perspective

Author

Listed:
  • Jiaping Qiu

    (DeGroote School of Business, McMaster University, Hamilton, Ontario L8S 4M4, Canada)

Abstract

This paper analyzes the impact of health insurance on household portfolio choice. Using the U.S. Survey of Consumer Finance and Health Retirement Survey databases, it finds that insured households are more likely to own stocks and invest a larger proportion of financial assets in stocks than uninsured households do. The results remain strong even after controlling for household characteristics and reverse causality. Further, the results are robust across different survey years and data sources. It suggests that a precautionary motive is strong in household portfolio choice decisions.

Suggested Citation

  • Jiaping Qiu, 2016. "Precautionary Saving and Health Insurance: A Portfolio Choice Perspective," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 11(2), pages 232-264, June.
    • Handle: RePEc:fec:journl:v:11:y:2016:i:2:p:232-264
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-005-016-0015-0
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    More about this item

    Keywords

    precautionary motive; health insurance; portfolio choice;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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