Narrow framing and long‐term care insurance

TitleNarrow framing and long‐term care insurance
Publication TypeJournal Article
Year of Publication2020
AuthorsGottlieb, D, Mitchell, OS
JournalJournal of Risk and Insurance
Type of ArticleJournal
ISSN Number0022-4367
KeywordsFinances, Long-term care insurance

We propose a model of narrow framing in insurance and test it using data from a new module we designed and fielded in the Health and Retirement Study. We show that respondents subject to narrow framing are substantially less likely to buy long-term care insurance than average. This effect is much larger than the effects of risk aversion or adverse selection, and it offers a new explanation for why people underinsure their later-life care needs.

Short TitleJournal Risk and Insurance
Citation Key10166