Wharton Pension Research Council Working Papers

Document Type

Working Paper

Date of this Version



We propose a model of narrow framing in insurance and test it using data from a new module we designed and fielded in the Health and Retirement Study. We show that respondents subject to narrow framing are substantially less likely to buy long-term care insurance than average. This effect is distinct from, and much larger than, the effects of risk aversion, or adverse selection, and it offers a new explanation for why people underinsure their later-life care needs.

JEL Code

D03, G22, I13

Working Paper Number


Copyright/Permission Statement

Opinions and errors are solely those of the authors and not of the institutions with which the authors are affiliated. © Gottlieb and Mitchell. All rights reserved.


The research reported herein was performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Michigan Retirement Research Center. Additional support was provided by the University of Michigan’s Health and Retirement Study, the Pension Research Council and Boettner Center at The Wharton School of the University of Pennsylvania, and the Department of Business Economics and Public Policy at the Wharton School of the University of Pennsylvania. This research is part of the NBER programs on Aging and Public Economics, and the Insurance Working Group. Programming assistance was ably provided by Yong Yu. Comments and suggestions from Sarah Auster, Paul Heidhues, Botond Koszegi, and Matthew Rabin are gratefully acknowledged.



Date Posted: 12 March 2019