Narrow Framing and Long-Term Care Insurance

TitleNarrow Framing and Long-Term Care Insurance
Publication TypeReport
Year of Publication2015
AuthorsGottlieb, D, Mitchell, OS
InstitutionCambridge, MA, National Bureau of Economic Research
KeywordsEmployment and Labor Force, Medicare/Medicaid/Health Insurance, Net Worth and Assets, Risk Taking

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 distinct from, and 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.

Endnote Keywords

narrow framing/long term care insurance/risk Aversion/adverse selection

Endnote ID


Citation Key5893