Determinants of Demand for Microinsurance in Cameroon
Date
2021-08-30
Authors
Médard, Nana Djomo Jules
Rodrigue, Ngouana Koudjou Serges
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research Consortium
Abstract
This study aims at identifying the determinants of demand for microinsurance in
Cameroon using a methodology based on the analytical framework proposed by
Heckman (1979). These are counting models with double selection. First, a biprobit
selection model is estimated to determine membership of an association on the one
hand, and subscription to a microinsurance on the other. Second, interest models
called counting models are estimated to identify and analyse the factors that affect
the number of microinsurance policies. Data for the study are from the Fourth
Cameroon Household Survey (ECAM4), a survey with national coverage conducted
by the National Institute of Statistics (NIS) in 2014. The results make it possible to
identify significant factors that are positively correlated with membership of an
association and subscription to a microinsurance. These are mainly factors such as
level of education, age squared and household size. Conversely, the results show
that male gender and the age of the household head significantly and negatively
influence membership and subscription. Furthermore, male gender, age squared,
household size and insurance premium are positively related to the number of
microinsurance policies purchased by household heads. Finally, age and level of
education are negatively correlated with the number of microinsurance policies
purchased. Furthermore, the inverse of the Mills ratio indicates that the number of
microinsurance policies is negatively correlated with unobserved characteristics. In
a context of poverty, these results call for a number of actions by public authorities
to promote microinsurance as a way of achieving universal social security protection.
Description
Keywords
Microinsurance , double selection , biprobit model , counting models , household