Insurance structure, risk sharing, and investment decisions: An empirical investigation of the implications of individual and group weather index insurance
Recognition of take-up and transaction cost challenges in individual microinsurance has led to a surge of interest in group microinsurance. Yet few studies have considered the effect of group insurance on the investment decisions of the insured. In the case of weather index insurance, this is an imp...
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| Formato: | Artículo preliminar |
| Lenguaje: | Inglés |
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International Food Policy Research Institute
2017
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| Acceso en línea: | https://hdl.handle.net/10568/147890 |
| _version_ | 1855536710550552576 |
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| author | Munro, Laura |
| author_browse | Munro, Laura |
| author_facet | Munro, Laura |
| author_sort | Munro, Laura |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Recognition of take-up and transaction cost challenges in individual microinsurance has led to a surge of interest in group microinsurance. Yet few studies have considered the effect of group insurance on the investment decisions of the insured. In the case of weather index insurance, this is an important omission. Analogous to group microcredit, group weather insurance may exacerbate two key challenges depending on the information environment: moral hazard and group pressure. Experimental results from a framed field experiment in Gujarat, India, confirm that group pressure leads to an 8 percent reduction in risk taking in contexts with perfect information and group insurance (relative to individual insurance). The effects of moral hazard are more limited, however. As higher risk taking is associated with higher average agricultural productivity—and thus, development—these findings put a premium on greater attention to group selection, the information environment, and the regulation of payout distribution. |
| format | Artículo preliminar |
| id | CGSpace147890 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2017 |
| publishDateRange | 2017 |
| publishDateSort | 2017 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1478902025-11-06T07:18:53Z Insurance structure, risk sharing, and investment decisions: An empirical investigation of the implications of individual and group weather index insurance Munro, Laura insurance investment analysis decision making finance Recognition of take-up and transaction cost challenges in individual microinsurance has led to a surge of interest in group microinsurance. Yet few studies have considered the effect of group insurance on the investment decisions of the insured. In the case of weather index insurance, this is an important omission. Analogous to group microcredit, group weather insurance may exacerbate two key challenges depending on the information environment: moral hazard and group pressure. Experimental results from a framed field experiment in Gujarat, India, confirm that group pressure leads to an 8 percent reduction in risk taking in contexts with perfect information and group insurance (relative to individual insurance). The effects of moral hazard are more limited, however. As higher risk taking is associated with higher average agricultural productivity—and thus, development—these findings put a premium on greater attention to group selection, the information environment, and the regulation of payout distribution. 2017 2024-06-21T09:23:27Z 2024-06-21T09:23:27Z Working Paper https://hdl.handle.net/10568/147890 en https://hdl.handle.net/10568/149641 https://hdl.handle.net/10568/150556 https://hdl.handle.net/10568/149808 https://doi.org/10.1111/1477-9552.12403 Open Access application/pdf International Food Policy Research Institute Munro, Laura. 2017. Insurance structure, risk sharing, and investment decisions: An empirical investigation of the implications of individual and group weather index insurance. IFPRI Discussion Paper 1642. Washington, DC: International Food Policy Research Institue (IFPRI). https://hdl.handle.net/10568/147890 |
| spellingShingle | insurance investment analysis decision making finance Munro, Laura Insurance structure, risk sharing, and investment decisions: An empirical investigation of the implications of individual and group weather index insurance |
| title | Insurance structure, risk sharing, and investment decisions: An empirical investigation of the implications of individual and group weather index insurance |
| title_full | Insurance structure, risk sharing, and investment decisions: An empirical investigation of the implications of individual and group weather index insurance |
| title_fullStr | Insurance structure, risk sharing, and investment decisions: An empirical investigation of the implications of individual and group weather index insurance |
| title_full_unstemmed | Insurance structure, risk sharing, and investment decisions: An empirical investigation of the implications of individual and group weather index insurance |
| title_short | Insurance structure, risk sharing, and investment decisions: An empirical investigation of the implications of individual and group weather index insurance |
| title_sort | insurance structure risk sharing and investment decisions an empirical investigation of the implications of individual and group weather index insurance |
| topic | insurance investment analysis decision making finance |
| url | https://hdl.handle.net/10568/147890 |
| work_keys_str_mv | AT munrolaura insurancestructurerisksharingandinvestmentdecisionsanempiricalinvestigationoftheimplicationsofindividualandgroupweatherindexinsurance |