The Impact Of Financial Literacy On Household Commercial Insurance Participation

Since the beginning of the 21st century,China has stepped into the aging of the population.Under the combined effect of the prolongation of the life expectancy of the population and the decline of the people’s fertility desire,the aging degree has become more and more intense,and continues to advance at an accelerated rate.In order to actively deal with the aging of population,protect the life of the elderly and improve the well-being of the people,it is an effective means to build a social security system with Chinese characteristics.Commercial insurance is an important part of the multi-level social security system.Our government has made positive efforts to develop commercial insurance at the supply level,but the depth and density of insurance are still low,and the motivation of household commercial insurance participation is obviously insufficient.In this context,it is of great practical significance and scientific value to study the problem of insufficient participation in household commercial insurance from the demand level.From the demand level to study the problem of insufficient family participation in commercial insurance,beginners start from the family income,family demographic structure,etc.After the subprime crisis in 2007,the attention of various countries to financial literacy has been increasing.Some scholars began to study from the perspective of financial literacy.The research at home and abroad shows that financial literacy can significantly influence the participation of family business insurance,but there is little related research and great development space.Therefore,this paper continues to study the impact of financial literacy on household commercial insurance participation,and makes some innovative research while drawing on existing experience.Based on the hypothesis of bounded rationality economy,this paper uses the data of China Household Finance Survey(CHFS)in 2017 to innovate the measurement index of financial literacy,and to study the impact of financial literacy and its dimension factors on household commercial insurance participation and commercial premium expenditure by constructing Probit model and Tobit model;Then it analyzes the heterogeneous influence of financial literacy on household commercial insurance participation from urban and rural areas,head of household gender and education level;Finally,the influence mechanism of financial literacy on family commercial insurance participation is deeply studied.The results show that:(1)The overall level of "three gold" is relatively low;The "three gold" level of urban families is significantly higher than that of rural families;The financial knowledge and financial literacy of female householders are slightly higher than that of male householders,but their financial skills are slightly lower than that of male householders.The level of "three gold" is positively correlated with the level of education.(2)Improving financial literacy can significantly promote household participation in commercial insurance and increase commercial premium expenditure;Financial knowledge and financial skills have significant effects on the participation of commercial insurance and the expenditure of commercial insurance premium,but the effect of financial skills is more significant.(3)From the perspective of urban and rural areas,gender and education level,financial literacy still has a significant effect on family commercial insurance participation,but the effect is different.There is no difference in education level,but it has a greater effect on urban families and female headed families.(4)Financial literacy can promote household commercial insurance participation through family wealth and commercial insurance trust channels,and the mediating effect of these two channels is equally important.The innovation of this paper includes the following four aspects:(1)The definition and measurement of financial literacy have not yet been unified,and the differences in the definition and questionnaire of financial literacy indicators present a diversified trend.The common feature of previous studies is that they only focus on the comprehensive indicators of financial literacy,and pay less attention to the dimensional indicators of financial literacy.In this paper,when we measure financial literacy,we not only innovate in the index structure,but also measure the dimension factors of financial literacy and make follow-up analysis,which adds ideas for the research of financial literacy.(2)In the existing literature,because the definition of financial literacy only contains one factor,or although financial literacy includes two or more factors in the definition,it is not measured separately,so in the study of the relationship between financial literacy and household commercial insurance participation,the dimension variable of financial literacy is not considered.In this paper,when studying the general influence of financial literacy on household commercial insurance participation,not only consider the overall variable of financial literacy,but also compare and analyze the dimension variables of financial literacy,so that the financial literacy on family commercial insurance participation is more comprehensive and systematic.(3)In the only relevant literature,the research on the impact of financial literacy on the heterogeneity of family commercial insurance participation is limited,only from the difference between urban and rural areas.In addition to the differences between urban and rural areas,this paper makes a comparative analysis of families with different gender and education level,which provides a reference for relevant targeted policies.(4)The internal logic analysis of "financial literacy—household commercial insurance participation" is rarely involved in previous studies.Therefore,this paper brings the mediating effect of family wealth and commercial insurance trust into the analysis framework of "financial literacy—household commercial insurance participation",and uses the univariate parallel multiple mediating effect model to analyze the channels of family wealth and commercial insurance trust that financial literacy affects household commercial insurance participation.