# Determinants for participating in the green insurance scheme: Binary logistic regression approach

The logistic regression model is used to identify the determinant/variables for the WTP for green insurance. The respondents were asked to reveal their preference/WTP for a hypothesised scheme of health insurance on a voluntary basis, given their budget constraints. The coefficients of the logistic regression for identifying the determinants for green insurance are presented in the Table 6.8.

The logistic regression model is used to identify the determinant/variables of the WTP for green insurance. The respondents are asked to reveal their WTP for a hypothesised scheme of green insurance on a voluntary basis, given their budget constraints. The coefficients of the logistic regression model for identifying the determinants for health insurance are the age of the respondent, marriage, number of family members, own house, respondents visiting government hospitals and WTP bids are showing the negative

Table 6.8 Variables in the equation showing the determinants for participating in the green insurance scheme

 Variables in the equation В S.E. Wald df Sig(P) Exp(B) AGE -.807 .375 4.633 1 .03 1** .446 GENDER 1.108 .862 1.652 1 .199 3.030 EDUCATION 3.3SO .720 21.649 1 .000*** 28.512 MARRIED -.510 .948 .289 1 .591 .601 FAMILY TYPE 1.699 1.386 1.503 1 .220 5.469 NOFM -2.674 .920 8.454 1 004*** .069 OWN HOUSE -1.440 .871 2.734 1 .098* .237 FAMILY INCOME 1.636 .489 1 1.206 1 .001*** 5.136 NOEMF .804 .586 1.881 1 .170 2.235 EPYA .590 1.242 .226 1 .635 1.805 DYA 3.920 1.448 7.333 1 .007*** 50.415 DISEFREQ 1.144 .489 5.472 1 .019** 3.140 HOSPITALTY -1.533 .892 2.958 1 .085* .216 ICGB 3.070 .946 10.530 1 .001*** 21.544 WTP BID -.003 .001 16.827 1 .001*** .997 Constant -8.973 4.073 4.853 1 .028** .000 a. Variable(s) entered in Step 1: AGE, GENDER, EDUCATION, MARRIED, FAMILY TYPE, NOFM, OWN HOUSE, FY, NOEMF, EPYA, DYA, DISEFREQ, HOSPITALTY, ICGB.WTPBID

indicates 10% level of significance,

indicates 5% level of significance,

indicates 1% level of significanceSource: Primary survey

probability related to WTP for green insurance. The current study reveals that the age of the respondents shows a significant negative relation with the probability of accepting the insurance scenario for green insurance, which implies that relatively older respondents are not willing to buy health insurance as compared to younger respondents. It might be because with the increase in age, cost of premium for insurance also increases. This is in line with the findings of the earlier studies of Bandara et al., 2013; Horton et ah, 2003, and Mandy, 1994. The negative value of the coefficient of the age of respondent shows the probability of willingness to participate in a green insurance scheme decreases with the increase in age of the respondents. Meanwhile, male respondents, levels of education (this is in line with findings of earlier studies such as Ali et ah, 2004 and Horton et ah, 2003), family income (Horton et ah, 2003; Blaine et ah, 2006), number of earning members in the family, environment pollution in your area, diseases in your area, frequency of occurrence of diseases, interest in conservation of green belt also show the positive relation with the probability of accepting the insurance scenario for green insurance.

Thus, out of the 15 variables, 10 variables are found to be significant in the study of the determinants for participating in the green insurance scheme in Binary Logistic Regression Approach. Levels of education, family income, number of family members, diseases in your area, interest in conservation of green belt and WTP bids are highly significant variables in the study of WTP for green insurance.

# Derivation of demand curve for given BIDS for WTP for green insurance

There are five bid values - of Rs.200, Rs.500, Rs.1,000, Rs.1,500 and Rs.2,500. Respondents are asked whether they are willing to pay the bid offered to them randomly as a premium on timely basis for purchasing green insurance. The study shows that 59.11 per cent of the respondents in Delhi are willing to pay for green insurance. Out of these, 25 per cent of the respondents are willing to pay Rs.200,20 per cent are willing to pay Rs.500, 19 per cent are willing to pay Rs. 1,000 and Rs.1500, respectively and only 17 per cent are willing to pay Rs.2,500, as shown in Table 6.9.

Table 6.10 shows that WTP for green insurance is the highest at the lowest bid of Rs.200. 74.44 per cent of respondents are WTP for the proposed BID of Rs.200 given to them in the questionnaire. But the WTP gradually decreases with the increase in the bid value. WTP for green insurance is the lowest at

Table 6.9 Percentage of respondents willing to pay the proposed BID amount for green insurance in Delhi

 BID amount in Rupees Percentage of respondents willing to pay for green insurance (%) 200 25 500 20 1,000 19 1,500 19 2,500 17

Source: Primary survey

Table 6.10 Willingness to pay for green insurance for proposed BIDs

 BID Amount (Rs.) Are you willing to pay for green insurance1 Total NO (in %) YES (in %) 200 46 (25.56) 134 (74.44) 180 500 74 (41.12) 106 (58.88) 180 1,000 78 (43.34) 102 (56.66) 180 1,500 82 (45.56) 98 (54.44) 180 2,500 88 (48.89) 92 (51.1) 180 TOTAL 368 (40.88) 532 (59.1 1) 900

Source: Primary survey

Figure 6.2 Demand curve showing WTP for green insurance for given BIDS. Source: Primary survey

the highest bid of Rs.2,500. This is in line with the findings of earlier studies by Ali et al., 2004; Halvorsen et ah, 2004; Bala et ah, 1999; Whynes et ah, 2005. The findings give the shape of the demand curve for WTP for green insurance, which is a downward sloping curve as shown in Figure 6.2.

Thus, around 59.1 lper cent of the respondents are willing to pay the BID amount for green insurance, while the rest have rejected the proposed bid in the survey. The demand curve showing the WTP for green insurance is a downward sloping curve for the given BID amounts in rupees, as shown in Figure 6.2. The downward sloping curve shows that the WTP for green insurance decreases with the increase in the values of BIDS proposed to the respondents randomly.