Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207327 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12501
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We examine evidence from two unique discrete choice experiments (DCE) on long term care insurance and several of its relevant attributes, and more specifically, choices made by 15,298 individuals in the United States with and without insurance. We study the valuation of the following insurance attributes, namely daily insurance benefit, insurance coverage, the compulsory and voluntary nature of the insurance policy design, alongside the costs (insurance premium) and health requirements This paper investigates respondents' preferences and willingness to pay (WTP) for these care insurance's attributes using a random parameter logit model, and assess the heterogeneity of choice responses using demographic, socioeconomic and attitudinal motivations to segment response to insurance choices. We find that an increase in the insurance premium by an additional 100US$ would reduce insurance uptake by 1pp. Insurance policy uptake is higher when it provides benefits for the lifetime (the monthly marginal WTP being $178.64), and voluntary (the monthly marginal WTP increases by an extra $74.71) as opposed to universal, and when it forgoes health checks (the monthly marginal WTP increases by an extra 28US$).
Subjects: 
self-insurance
constrained choices
long term care insurance
behavioural constraints
insurance design
JEL: 
I18
Document Type: 
Working Paper

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