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

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          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.


          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).


          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.


          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.

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          Most cited references 32

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          Identification of Endogenous Social Effects: The Reflection Problem

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            The Utility Analysis of Choices Involving Risk

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              Community-based health insurance in low-income countries: a systematic review of the evidence.

               Björn Ekman (2004)
              Health policy makers are faced with competing alternatives, and for systems of health care financing. The choice of financing method should mobilize resources for health care and provide financial protection. This review systematically assesses the evidence of the extent to which community-based health insurance is a viable option for low-income countries in mobilizing resources and providing financial protection. The review contributes to the literature on health financing by extending and qualifying existing knowledge. Overall, the evidence base is limited in scope and questionable in quality. There is strong evidence that community-based health insurance provides some financial protection by reducing out-of-pocket spending. There is evidence of moderate strength that such schemes improve cost-recovery. There is weak or no evidence that schemes have an effect on the quality of care or the efficiency with which care is produced. In absolute terms, the effects are small and schemes serve only a limited section of the population. The main policy implication of the review is that these types of community financing arrangements are, at best, complementary to other more effective systems of health financing. To improve reliability and validity of the evidence base, analysts should agree on a more coherent set of outcome indicators and a more consistent assessment of these indicators. Policy makers need to be better informed as to both the costs and the benefits of implementing various financing options. The current evidence base on community-based health insurance is mute on this point.

                Author and article information

                [1 ]Research Department, Micro Insurance Academy, Garhi, East of Kailash, New Delhi, India, daviddror@
                [2 ]School of Health Policy and Management, Erasmus University Rotterdam, Rotterdam, the Netherlands, daviddror@
                [3 ]Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi, India
                Author notes
                Correspondence: David Mark Dror, Micro Insurance Academy, A-153 (Ground Floor), DDA Double Storey Flats, Garhi, East of Kailash, New Delhi 110065, India, Tel +41 78 790 6789, Email daviddror@
                Risk Manag Healthc Policy
                Risk Manag Healthc Policy
                Risk Management and Healthcare Policy
                Risk Management and Healthcare Policy
                Dove Medical Press
                11 September 2018
                : 11
                : 139-158
                © 2018 Dror et al. 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.

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