Research On The Impact Of Commercial Insurance Purchase On Rural Household Consumption

The "Fourteenth Five-Year Plan" proposes to work faster to create a new pattern of development that focuses on domestic circulation and features positive interplay between domestic circulation and international circulation.Due to the global economic recession and drastic changes in the external environment,the smooth operation of international circulation faces many challenges.Therefore,strengthening the leading role of domestic circulation has become the strategic orientation of the "Fourteenth Five-Year Plan".To smooth the domestic circulation,we need to speed up the cultivation of domestic demand and promote consumption.At present,China’s rural population is 498 million,accounting for about 35% of the total population.The rural consumer market has great potential.However,in 2021,the per capita consumption amount of rural residents in China is only about 50% of that of urban residents.The consumption level of rural residents is obviously insufficient.As a market-oriented risk dispersion tool,insurance can reduce the impact of uncertainty on rural family wealth,encourage them to reduce precautionary savings and increase consumption.As an important part of China’s multi-level medical security system,commercial health insurance has many types and wide coverage.It can effectively transfer and disperse the health risks faced by rural families,reduce the uncertainty of future expenditure,promote their consumption level,and then play an important role in developing the rural consumer market,promoting revitalization of rural areas and improving the domestic circulation.Based on the above background,this paper analyses the "impact of commercial health insurance on rural household consumption".Using both theoretical research and empirical research methods,based on literature review and current situation analysis,this paper first analyzes the mechanism of purchasing commercial health insurance to promote family consumption by using the two theories of "Precautionary Savings" and "Maslow demand".Then,using the survey data of CHFS 2017&2019,this paper estimates the change of rural household consumption after purchasing commercial health insurance through PSM-DID method.The empirical results show that the purchase of commercial health insurance has a positive impact on the total consumption and basic consumption of rural families at the confidence level of 5%,and the degree of impact is 14.4% and 17.2% respectively.However,it doesn’t significantly promote the high-level consumption of rural families.Robustness test is carried out by replacing the PSM method,and the significant results are still same.The theoretical and empirical analysis of this paper shows that the purchase of commercial health insurance can significantly promote the total consumption and basic consumption of rural families.Based on the research conclusion,this paper puts forward relevant suggestions on how to promote the development of commercial health insurance from the perspective of the government,insurance companies and consumers.