Behavioral Determinants of Insurance Non-Take-Up Among Low-Income Households in Northern Nigeria

This study investigates the behavioral and psychological determinants of insurance non-take-up among low-income households in northern Nigeria, with field data collected from Katsina, Bauchi, and Gombe states. Despite the existence of subsidized microinsurance and government-facilitated agricultural insurance products in northern Nigeria, enrollment rates remain significantly below target levels. Standard economic explanations citing affordability and awareness are insufficient to account for the full extent of non-participation, suggesting that behavioral factors including present bias, probability neglect, trust deficits, and loss aversion may play important explanatory roles. This research employs a behavioral economics framework with primary data from 450 household heads across the three states. Structured questionnaires incorporating experimental vignettes measure present bias, insurance-specific risk perceptions, loss aversion coefficients, and institutional trust indicators. Probit regression is applied to identify behavioral predictors of insurance non-take-up after controlling for income and awareness. Preliminary findings are expected to confirm that present bias and institutional distrust are statistically significant predictors of non-participation independent of income effects. The study contributes behavioral insurance economics evidence from a Muslim-majority northern Nigerian context, filling a gap in the global microinsurance literature. Policy recommendations focus on commitment savings products linked to insurance and community-endorsed trust-building initiatives. Keywords: Behavioral Economics, Insurance Non-Take-Up, Low-Income Households, Northern Nigeria, Present Bias.