Cost of a Policy: Social Trust and Health Insurance Uptake in Azerbaijan and Emerging Markets

Abstract

Do low levels of social trust increase a population’s sense of insecurity and desire to get an insurance policy or alternatively make it turn to informal networks for safety nets? While generalized social trust is an important variable to explain insurance uptake, the existing literature offers conflicting accounts of its impact on a population’s insurance demand. By employing a mixed-methods research design that combines multivariate regression of large-N cross-country data with a qualitative case study of Azerbaijan, the study provides a systematic analytical measurement of the impact of social trust on the voluntary purchase of health insurance in 93 emerging markets. The article finds a statistically significant positive effect of generalized trust on voluntary health insurance purchases. The findings suggest that in countries with a low level of social trust, people favor informal safety nets rather than formal contracts with insurance firms.