A Review Report for “Determinants of Life Insurance Purchase Decision

Making in Bosnia and Herzegovina” (R2)

The paper is improved with clearer statement of its contributions and better organization, but the
updated version (R2) still leaves the following concerns unresolved which were mentioned in the
last review report but addressed in more detail in this review report.

1) Sample Selection and Data Presentation

On Pages 9 and 10, Tables 2 and 3 are confusing. For example, the total percentage usually
should be 100% for each category, although readers might know what 40% and 60% refer to
in these tables. I suggest that the author(s) could report Tables 2 and 3 in a way that is
consistent with the statement on Page 8 about how the respondents were chosen according to
socio-demographic characteristics, “The criteria for selection of the respondents was their
place of residence, monthly revenue and life insurance policy holding. Therefore, the share
of the respondents from each entity of BiHBosnia and Herzegovina (Brcko District, BiH
Federation, and Republic of Srpska) was similar to their share in the total life insurance
premium in the country.” In this way, the data could be presented more clearly, and it might
be more convincing that these selected respondents could be representative for the
population.

2) Binary Logistic Regression (Hypotheses 2-6)

On Page 10, “Binary logistic regression was used for confirming the effects of individual
determinants in customer life insurance purchase decision making” is well said. However, if
the paper intends to show significant effect of explanatory variables, the demographic
variables should be included in this binary logistic regression as control variables. The
control variables could be the ones that may significantly affect the demand for life insurance
and have been discussed in the section of Literature Review. Otherwise, the results of the
significant effect of some explanatory variables examined in this paper could be changed.

Although the author(s) mentioned this issue in the section of Conclusions for future research
direction, the author(s) still cannot dismiss this issue when explaining the empirical results in
relevant sections. The importance of control variables in regression models is cited from
Wikipedia as follows, “…Control variables could strongly influence experimental results,
were they not held constant during the experiment in order to test the relative relationship of
the dependent and independent variables…Any change in a control variable in an experiment
would invalidate the correlation of dependent variables to the independent variable, thus
skewing the results.”

If the author(s) cannot include control variables for some reason, the hypotheses should be
updated to “a positive or negative correlation/relationship” instead of “a significant
effect/significantly affect”.

3) “Decision-making” in the Life Insurance Demand Literature

 On Page 8, “In the conducted analysis, the respondents who hold life insurance policy were
considered as the ones who decided to purchase life insurance, while these who do not hold
the policy were considered as the ones who decided not to purchase life insurance” is not
solid enough to confirm that holding life insurance or not by the respondents is based on the
decision-making of these respondents (it could be, but depending on the survey design).
Again, if not given more information, in my mind, this paper is examining the life insurance
ownership, purchase, or holdings, not the life insurance purchase decision-making. Actually,
it is totally fine to dismiss decision-making in the paper, since decision-making is rarely used
in the literature about life insurance demand. I suggest the author(s) could double check the
literature that has been cited in this paper, and find out the best way to present it.

4) Paper Presentation

The organization of the paper is improved a lot, but the paper presentation still needs further
improvement throughout the paper. For example, on Pages 5 and 6, it is still not clear enough
about the connection between the literature and the hypotheses presented in this paper. The
author(s) should discuss the hypotheses one by one when going through the relevant
literature for each factor. On Page 14, the author(s) should address why the Spearman's
correlation coefficient test is relevant and important, the sign of correlations based on the test
results, and the implications, applications, or tuitions of these test results.