Back to Journals » Risk Management and Healthcare Policy » Volume 11

The effect of consensus on demand for voluntary micro health insurance in rural India

Authors Dror DM, Majumdar A, Chakraborty A

Received 6 April 2018

Accepted for publication 23 July 2018

Published 11 September 2018 Volume 2018:11 Pages 139—158


Checked for plagiarism Yes

Review by Single anonymous peer review

Peer reviewer comments 4

Editor who approved publication: Dr Kent Rondeau

David Mark Dror,1,2 Atanu Majumdar,1 Arpita Chakraborty3

1Research Department, Micro Insurance Academy, Garhi, East of Kailash, New Delhi, India; 2School of Health Policy and Management, Erasmus University Rotterdam, Rotterdam, the Netherlands; 3Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi, India

Introduction: This study deals with examining factors that catalyze demand for community-based micro health insurance (MHI) schemes. We hypothesize that demand for health insurance is a collective decision in the context of informality and poverty. Our hypothesis challenges the classical theory of demand which posits individual expected diminishing utility. We examine factors beyond the traditional exogenous variables.
Methods: This study uses data collected through a household survey conducted among self-help groups in rural India in the states of Uttar Pradesh and Bihar before the implementation of three community-based MHI schemes. Additional information was extracted from the management information system maintained by the schemes. At the first step, we compared the estimated probability of a household joining the scheme (obtained by applying logistic regression) to the actual uptake. In the next step, we analyzed the role of consensus within groups on demand for health insurance (by applying ordinary least square regressions).
Results: The results of the logistic regressions indicated that exogenous household characteristics could not explain the probability of joining health insurance. We observed that group consensus on several critical issues, such as the price of the insurance, perceptions about exposure to adverse health events, and perceptions of the quality of service of local health care providers, was the important determinant of demand for insurance.
Conclusion: Based on the analysis, we reject the null hypothesis that demand is an individual decision at the household level. The analysis upholds the assumption that demand is created through a process of consensus building on perceptions of risk exposure, welfare gains from the insurance, and quality of local health care provision. Success in catalyzing demand for health insurance in the informal sector depends on encouraging group dialog.

Keywords: Community-based Health Insurance, micro insurance, consensus coefficient, consensus building, demand for micro insurance, collective decision

Creative Commons License This work is published and licensed by Dove Medical Press Limited. The full terms of this license are available at and incorporate the Creative Commons Attribution - Non Commercial (unported, v3.0) License. By accessing the work you hereby accept the Terms. Non-commercial uses of the work are permitted without any further permission from Dove Medical Press Limited, provided the work is properly attributed. For permission for commercial use of this work, please see paragraphs 4.2 and 5 of our Terms.

Download Article [PDF]  View Full Text [HTML][Machine readable]