Determinants of Insurance Participation in Rural China (2014)

Undergraduate: William Lee

Faculty Advisor: Shufa Du
Department: Economics

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While China experienced rapid economic growth in the past decade, development of health care lagged in comparison. After the collapse of the previous insurance system in the late 1970s, a New Rural Cooperative Medical System was implemented in 2003 to continue healthcare support for rural households. Although research has been done to assess the outcome of the program, limited studies have been done to analyzed the decision-making factors by rural consumers. This study aims to investigate the impact of healthcare access on insurance participation rate. The data for this study will be extracted from the China Nutrition and Health survey, a longitudinal dataset collected by Carolina Population Center at UNC. Probit regressions will be utilized to identify the relationships and to take account of other control variables. Preliminary result shows that the cost of travelling is not statistically significant; however, the travel time to a medical facility decreases the probability to have insurance. On the other hand, the availability of necessary medicine increases the participation rate. Other factors, such as level of education, income and presence of chronic illness, also increase the probability to have insurance. Although additional modifications to the model and data management technique will be determined, the preliminary results indicate that improving access to healthcare should be integrated as a part of the new system to maximize insurance coverage.