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Mathematical Problems in Engineering
Volume 2014, Article ID 658205, 9 pages
Research Article

The Role of Wealth and Health in Insurance Choice: Bivariate Probit Analysis in China

School of Business, Central South University, Changsha, Hunan 410083, China

Received 26 December 2013; Accepted 28 January 2014; Published 13 March 2014

Academic Editor: Chuangxia Huang

Copyright © 2014 Yiding Yue and Jinyou Zou. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


This paper captures the correlation between the choices of health insurance and pension insurance using the bivariate probit model and then studies the effect of wealth and health on insurance choice. Our empirical evidence shows that people who participate in a health care program are more likely to participate in a pension plan at the same time, while wealth and health have different effects on the choices of the health care program and the pension program. Generally, the higher an individual’s wealth level is, the more likelihood he will participate in a health care program; but wealth has no effect on the participation of pension. Health status has opposite effects on choices of health care programs and pension plans; the poorer an individual’s health is, the more likely he is to participate in health care programs, while the better health he enjoys, the more likely he is to participate in pension plans. When the investigation scope narrows down to commercial insurance, there is only a significant effect of health status on commercial health insurance. The commercial insurance choice and the insurance choice of the agricultural population are more complicated.