Research on influences of education and financial literacy on commercial insurance purchase in China

Shiyan Lou, Junhao Wang, Yi Ting Zeng, Chun Cheong Fong

Research output: Contribution to journalArticlepeer-review


Purpose: With the rapid development of the economy in China, the wealth of residents has continued to increase, and most families have gradually been aware of the importance of commercial insurance. The family purchase of insurance in China was still not optimistic. Many scholars focus on wealth allocation, but the attention to the commercial insurance market was still less. Based on previous research studies, this study aims to investigate the impact of education and financial literacy on the commercial insurance purchase in China. Design/methodology/approach: China Household Finance Survey data was used to investigate the purchase of commercial insurance in Mainland Chinese families. Factor analysis was used to construct financial literacy, and the education data were combined to analyze the commercial insurance purchase using the Probit model and the Tobit model. Finally, the contributions of education and financial literacy to commercial insurance purchases were analyzed. Findings: Both education and financial literacy exerted a positive impact on the purchase of commercial insurance in China. Individual characteristics such as gender, age, marital status, risk attitude, purchase of social insurance and consultation with a financial advisor possessed significant effects; household factors like household size and assets, macro factors such as the density of financial institutions and the density of financial industry staff, and regional factors as local unemployment rate excreted influences on the commercial insurance purchase. Originality/value: Based on the current economic development in China, this study investigated and expressed opinions on the public and insurance companies regarding commercial insurance purchases. It accentuated financial literacy and education as factors that facilitated commercial insurance development.

Original languageEnglish
Pages (from-to)96-119
Number of pages24
JournalPacific Accounting Review
Issue number1
Publication statusPublished - 29 Apr 2024


  • Commercial insurance
  • Education
  • Financial literacy
  • Mediating effect


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