| With the rapid development of economy and the optimization of consumer structure,the insurance industry is showing a steady growth trend.The insurance industry gives full play to the function of risk protection,but there are still problems such as unbalance insurance structure,insurance density and insurance depth.According to the national conditions,it is of great significance to explore the reason and method of improving the resident participation rate.Based on the Prospect Theory,this paper studies the effects of loss aversion and narrow framing on insurance demand.At the theoretical level,the mathematical model of loss aversion affecting insurance demand is analyzed.Then,on the basis of combing the correlation between narrow frame and loss aversion in the existing literature,the influence mechanism of loss aversion on insurance demand under narrow frame thinking is further discussed,and the corresponding theoretical hypothesis is put forward.On the basis of theoretical analysis and statistical analysis of insurance demand factors and loss aversion heterogeneity,this paper adopts the data of China Household Finance Survey(CHFS)in 2017,divides the respondents into groups based on the correlation between narrow framing and loss aversion,and constructs the Probit model for empirical test.The results showed that the regression coefficient of loss aversion was positively correlated with insurance purchase for the low loss aversion group who were more inclined to broad frame thinking.For people with high loss aversion who are more inclined to narrow frame thinking,the regression coefficient of loss aversion is negatively correlated with insurance purchase.Combining theoretical and empirical test results,the paper concludes that individuals with higher loss aversion are more inclined to narrow frame thinking.When facing insurance purchase decisions,they usually pay more attention to the loss aversion caused by the current premium payment than the compensation for the future risk.Therefore,the increase of loss aversion will further inhibit the demand for insurance.However,individuals with lower loss aversion tend to think in a broad frame.They attach more importance to the future risk compensation of insurance,and are not sensitive to the cost of premiums.However,when loss aversion increases,risk aversion will also increase,and stronger demand for risk compensation will promote their consumption of insurance.Finally,based on the conclusion obtained,combined with the current conditions and the problems facing the insurance industry,this article puts forward policy suggestions for the development of our insurance industry. |
