Study of the Projection Bias Based on the Current Trend of Shanghai Social Insurance

Abstract

In the context of China's aging population and the post-epidemic era, Shanghai's social insurance payment rate has declined due to relevant policies and projection bias. This study consults the predecessor's achievements in the fields of projection bias theory and behavioral economics, and demonstrates the formation and manifestation of projection bias under the social security phenomenon in Shanghai. Peoples intense attention and expectation towards the quality of future lives derive irrationality in their decision-making, hence impacting their potential preceiving of social security system. This article aims to explore peoples deeper behavioral logical reactions under economic phenomena, as well as the inspiration of behavioral economics in policy research. The article demonstrated the process of peoples change in perceiving of the social insurance, which is based on projection bias. This study uses data from the Ministry of Human Resources and Social Security of China and China Financial Regulatory Commission, to decompose the projection bias in holistic phenomena. Also, other possible factors and possible behavioral economics theories leading to the phenomenon have been discussed.