Influence of Egoistic and Altruistic Bequest Motives on the Willingness to Participate in Reverse Mortgages in China*

From the perspective of behavioral economics, this study uses a scenario simulation experiment and the ordered-probit econometric model to empirically analyze the influence of egoistic and altruistic bequest motives of the elderly on willingness to participate in reverse mortgages. The findings are as follows. (i) When controlling for the demographic characteristics of the elderly, the marginal probability of their willingness to participate in reverse mortgages is influenced by two constraints: the egoistic bequest motive and the altruistic bequest motive. However, compared with the egoistic bequest motive, the altruistic bequest motive more strongly affects such willingness. (ii) Improving satisfaction with community old-age services can significantly weaken the effects of the egoistic bequest motive on the willingness to participate in reverse mortgages, generally by weakening dependence on family old-age care. However, property tax implementation can significantly reduce the constraint effects of altruistic bequest motives on such willingness, mainly by affecting the cost of housing inheritance to the children. (iii) To increase demand for reverse mortgages, financial institutions should constantly innovate and optimize the operation modes of reverse mortgages to more efficiently cope with the influence of egoistic and altruistic bequest motives of the elderly. Government departments should continuously promote property tax reform and improve the quality of community services for the aged to indirectly promote willingness to participate in reverse mortgages.