The role of asymmetric information in multi-peril picture-based crop insurance: Field experiments in India
Smallholder farmers in developing countries generally lack access to affordable agricultural insurance, in part because of high loss verification costs and asymmetric information in indemnity insurance and basis risk in index-based insurance. Advances in remote sensing and other digital technologies...
| Autores principales: | , |
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| Formato: | Artículo preliminar |
| Lenguaje: | Inglés |
| Publicado: |
International Food Policy Research Institute
2021
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/143399 |
| _version_ | 1855536297336111104 |
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| author | Ceballos, Francisco Kramer, Berber |
| author_browse | Ceballos, Francisco Kramer, Berber |
| author_facet | Ceballos, Francisco Kramer, Berber |
| author_sort | Ceballos, Francisco |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Smallholder farmers in developing countries generally lack access to affordable agricultural insurance, in part because of high loss verification costs and asymmetric information in indemnity insurance and basis risk in index-based insurance. Advances in remote sensing and other digital technologies can help overcome these challenges by allowing for low-cost, remote loss verification, and settling claims based on observed visible damage in a farmer’s fields. By effectively proxying for indemnity insurance, however, such a product may be subject to moral hazard and adverse selection. We test these hypotheses leveraging the rollout of picture-based crop insurance among smallholder farmers in northwestern India. We find no evidence of moral hazard or adverse selection, and that the use of technologies increases willingness to pay. We conclude that digital technologies are a valuable tool to provide low cost, sustainable crop insurance remotely, at lower levels of basis risk than index products. |
| format | Artículo preliminar |
| id | CGSpace143399 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2021 |
| publishDateRange | 2021 |
| publishDateSort | 2021 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1433992025-12-02T21:02:41Z The role of asymmetric information in multi-peril picture-based crop insurance: Field experiments in India Ceballos, Francisco Kramer, Berber insurance asymmetric information field experimentation technology crops farmers agricultural insurance crop insurance smallholders mobile equipment imagery risk adverse selection Smallholder farmers in developing countries generally lack access to affordable agricultural insurance, in part because of high loss verification costs and asymmetric information in indemnity insurance and basis risk in index-based insurance. Advances in remote sensing and other digital technologies can help overcome these challenges by allowing for low-cost, remote loss verification, and settling claims based on observed visible damage in a farmer’s fields. By effectively proxying for indemnity insurance, however, such a product may be subject to moral hazard and adverse selection. We test these hypotheses leveraging the rollout of picture-based crop insurance among smallholder farmers in northwestern India. We find no evidence of moral hazard or adverse selection, and that the use of technologies increases willingness to pay. We conclude that digital technologies are a valuable tool to provide low cost, sustainable crop insurance remotely, at lower levels of basis risk than index products. 2021-12-31 2024-05-22T12:13:51Z 2024-05-22T12:13:51Z Working Paper https://hdl.handle.net/10568/143399 en https://doi.org/10.1016/j.deveng.2019.100042 https://doi.org/10.1016/j.agrformet.2018.11.002 https://hdl.handle.net/10568/110712 https://doi.org/10.2499/p15738coll2.133524 https://doi.org/10.2499/p15738coll2.134751 Open Access application/pdf International Food Policy Research Institute Ceballos, Francisco; and Kramer, Berber. 2021. The role of asymmetric information in multi-peril picture-based crop insurance: Field experiments in India. IFPRI Discussion Paper 2088. Washington, DC: International Food Policy Research Institute (IFPRI). https://doi.org/10.2499/p15738coll2.134941. |
| spellingShingle | insurance asymmetric information field experimentation technology crops farmers agricultural insurance crop insurance smallholders mobile equipment imagery risk adverse selection Ceballos, Francisco Kramer, Berber The role of asymmetric information in multi-peril picture-based crop insurance: Field experiments in India |
| title | The role of asymmetric information in multi-peril picture-based crop insurance: Field experiments in India |
| title_full | The role of asymmetric information in multi-peril picture-based crop insurance: Field experiments in India |
| title_fullStr | The role of asymmetric information in multi-peril picture-based crop insurance: Field experiments in India |
| title_full_unstemmed | The role of asymmetric information in multi-peril picture-based crop insurance: Field experiments in India |
| title_short | The role of asymmetric information in multi-peril picture-based crop insurance: Field experiments in India |
| title_sort | role of asymmetric information in multi peril picture based crop insurance field experiments in india |
| topic | insurance asymmetric information field experimentation technology crops farmers agricultural insurance crop insurance smallholders mobile equipment imagery risk adverse selection |
| url | https://hdl.handle.net/10568/143399 |
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