Narrow Framing and Long-Term Care Insurance

Daniel Gottlieb, Olivia S. Mitchell

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

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.

Original languageEnglish
Pages (from-to)861-893
Number of pages33
JournalJournal of Risk and Insurance
Volume87
Issue number4
DOIs
StatePublished - 1 Dec 2020

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