Research on Influencing Factors of Health Insurance Demand Based on Projection Bias Perspective

Projection bias means that individuals often overestimate the consistency of future tastes with current tastes which can project current tastes into future psychological tendencies. Projection bias modifies neoclassical school's hypothesis of completely rational man. Consumers will become bounded rational states after being affected by systematic biases in the prediction of future utility. This paper first explains the mechanism of projection bias and quotes the expected utility model after adding projection bias proposed by Loewenstein et al, and then collects the data by questionnaire. In the descriptive analysis section, this paper demonstrates the existence of projection bias by dividing the "completely healthy" state and "physical discomfort" state and they can affect individual health insurance purchase decisions. In addition, there are two additional questions about the "degree of discomfort" and the "frequency of physical discomforts in the past two months". They are settled to explain the difference in the intensity of the projected bias will also affect the health insurance purchase decision. By setting the "sleeping time per night" and "whether participating a fitness program" questions, this paper proves the effect of emotional factors on projection bias. The conclusions are as follows: (1) Individuals with physical discomfort have a more obvious projection bias, which has a stronger demand for health insurance products. (2) In people with physical discomfort, the severity of an individual's physical discomfort will cause them to have different levels of projection bias which results in a difference in the demand for health insurance products. (3) Sleeping time per night and whether or not to participate in the fitness program can reflect the individual's psychological expectation of their own health status to a certain extent so that different levels of projection bias can be generated through the emotional state that affecting the demand for health insurance products.