Description of variables

WTP is assumed to be influenced by the age, socio-economic and health- related characteristics of the respondents. Descriptions of variables under the study of WTP for green insurance were listed in Table 6.1.

Variables in the model are as follows:

Dependent variables = WTP for green insurance

The explanatory variables are classified into four categories:

The first category consists of the individual-specific characteristics, such as age of respondent, gender, education and marital status.

Table 6.1 Descriptions of variables for the study of WTP for green insurance


Description of the variables

Dependent variables

WTP (binary)

Are you willing to pay a premium for green insurance on a monthly basis?

1 for a positive responsive and 0 for a non-response

WTPA (quantitative variables)

What amount are you willing to pay (WTP amount in rupees)?

Independent variables

Quantitative variables


Age of the respondent (in years)


Number of family members


Family income


Number of earning members in the family


Bids given for regular and timely premium that the respondent is willing to pay for green insurance on monthly basis to finance healthcare cost

Binary variable




Marital status


Family type


Own house


Is there environmental pollution in your area?


Do you have an interest in conservation of the green belt?


Do you have health insurance?


Does disease exist in your area?


Hospital type

Categorical variables


Educational level


Do the people in your locality help in keeping the environment clean?


What is the frequency of disease occurring in your family?


Is any family member suffering from a disease?

The second category includes family-specific characteristics, such as family type and number of members in the family.

The ‘third category’ includes economic factors, such as, ownership of house, monthly income of the respondent’s family, number of earning members and insurance awareness.

The forth category includes pollution, environment problem and diseases, types of hospital services used and interest in conservation of green belt.

Explanatory variables were defined as:

X, = Age of the respondent in years X2 = Gender (Female=0, Male= I)

^ = Educational qualification of the husband (Illiterate = 0, Primary

3 school= I, High school =2, Graduate=3, More than graduate=4)

X4 = Marital status (Unmarried =0, Married = I)

X5 = Family type (Joint family=0, Nuclear family= I)

X6 = Number of family members

X7 = Own house (Own house =0, Rental house=l)

X8 = Family income

X, = Number of earning members in the family X, = Environment pollution in your area (No=0,Yes= I)

X|0 = Existence of disease in your area (No=0,Yes=l)

У = Frequency of diseases occurring (Frequently= I, Moderately=2,

11 Rarely = 3, Not at alI=4)

X|2 = Hospital type (Private hospitals =0, Government hospitals= I)

X|з = Interest in conservation of green belt (No=0,Yes=l)

Statistical analysis

The statistical analysis for the survey study was done in two parts: The first part include conducting the binary logistic regression analysis where the responses were ‘Yes’ or ‘No’ for WTP for health insurance and the variables influencing the decision (Bandara et al., 2013). In the second part, respondents who refused to accept the offered BID for green insurance were asked to state the maximum amount in rupees that they were willing to pay to obtain for health insurance, by using an open-ended question. This indicated a continuous measure of WTP for the goods or services, taking into account the monthly WTP as the dependent variable and finding the direction and magnitude of the determinant by using the multiple regression analysis.

Therefore, the logistic regression and linear regression techniques were applied in the study to test the WTP for green insurance. Linear regression and a general form of logistic regression were used to study the influence of the set of predicator variables on the WTP for green insurance.

Statistical analysis I

I: Binary logistic regression

Logistic regression is a common method to estimate WTP. This method was chosen because the response variable was in binary form and the predictor variable was a mix of continuous variables, binary variables and categorical variables. Since some of the respondents were not willing to pay the offered bid amount and their WTP becomes zero, which means that they did not want green insurance and had rejected the scenario. Therefore, the study aimed to identify the determinants of decision-making, that is, whether to pay for green insurance or not and what determinants helped respondents in decision-making, which was an insight research question. This part describes the method (Logit model) used to identify the determinants of participating in the green insurance scheme (Bandara et al., 2013). It provided an overview of the WTP, focusing on the CVM.

The specified model is given below.

The empirical model, measuring the probability of WTP for green insurance by the people of Delhi, is as follows:

P; is the probability of function and WTPj is the WTP for green insurance, where 1 indicates that the individual is willing to pay for green insurance and 0 indicates otherwise. Xj is the vector of the observed characteristic of demand, which includes socio-economic, attitudinal and behavioural variables; В is the vector with the corresponding estimated variable coefficient and the error vector E, consists of the unobserved random variable.

Binary logistic model:

where, p is the probability of WTP for green insurance (Yes = 1, No = 0).

< Prev   CONTENTS   Source   Next >