The Impact of Personality Traits on Household Commercial Insurance Participation -- Evidence from China

Abstract

This paper empirically investigates the impact of householders personality traits on the probability and depth of household commercial insurance participation at the micro level using the China Family Panel Studies (CFPS) 2018 data. After considering the robustness tests and endogenous issues, the regression results show that, among the five personality traits, the openness trait can significantly increase the probability of household commercial insurance participation, the annual expenditure on household commercial insurance, and the share of household commercial insurance expenditure in the annual household income, while the effects of other personality traits on commercial insurance are not significant. The mechanism analysis shows that the householders openness trait can significantly improve his sense of social trust, increase his financial literacy, and then effectively promote household commercial insurance participation. Heterogeneity analysis finds that the promotion effect of openness trait on commercial insurance is more obvious in urban households and the households with high levels of financial assets. The paper provides a new perspective to explain the current low participation rate of commercial insurance in China, and at the same time provides useful references for relevant departments to formulate policies and for commercial insurance companies to standardize their development strategies.