Risk Communication Clarity and Insurance Demand: The Case of the COVID-19 Pandemic

52 Pages Posted: 8 Mar 2023

See all articles by Jingbing Feng

Jingbing Feng

East China University of Science and Technology (ECUST) - School of Business

Xian Xu

Fudan University - Department of Insurance and Risk Management

Hong Zou

The University of Hong Kong - Faculty of Business and Economics

Date Written: 2023

Abstract

We study how the clarity of COVID-19 risk communications affects COVID-19 insurance demand, using proprietary prefecture-level insurance data from China. We find when local disclosure of COVID-19 risk contains case origin information, local purchase of COVID-19 insurance and local internet search of COVID-19 information increase, controlling for local new confirmed cases and deaths. The results are robust to using the disclosure clarity of a city’s major neighboring city. The findings support improved knowledge about risk leading individuals to engage in more risk management and speak to the debate over how risk communication affects individuals’ risk behaviors.

Note:
Funding Information: Zou acknowledges the financial support from a competitive General Research Fund (GRF) grant from the Research Grants Council of the Hong Kong Special Administrative Region, China (Project No. HKU 17503521), and the financial support of University of Hong Kong Seed Fund for Basic Research (202011159153). Feng acknowledges the financial support of the Fundamental Research Funds for the Central Universities (JKN012022005).

Declaration of Interests: No competing interest involved.

Keywords: Risk information, Information ambiguity, Risk salience, Insurance demand, COVID-19

JEL Classification: I13, G32, D82

Suggested Citation

Feng, Jingbing and Xu, Xian and Zou, Hong, Risk Communication Clarity and Insurance Demand: The Case of the COVID-19 Pandemic ( 2023). Journal of Economic Dynamics and Control, Vol. 146, 2023, Available at SSRN: https://ssrn.com/abstract=4333456 or http://dx.doi.org/10.2139/ssrn.4333456

Jingbing Feng

East China University of Science and Technology (ECUST) - School of Business

Xian Xu

Fudan University - Department of Insurance and Risk Management

Hong Zou (Contact Author)

The University of Hong Kong - Faculty of Business and Economics ( email )

China

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