The social dilemma of microinsurance: Free-riding in a framed field experiment
Health shocks are among the most important unprotected risks for microfinance clients, but take-up of micro health insurance remains low. A framed field experiment with credit groups in Tanzania, eliciting demand for group versus individual insurance, attributes this to a social dilemma. In a contex...
| Main Authors: | , |
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| Format: | Journal Article |
| Language: | Inglés |
| Published: |
Elsevier
2016
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/148498 |
| _version_ | 1855524811166449664 |
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| author | Janssens, Wendy Kramer, Berber |
| author_browse | Janssens, Wendy Kramer, Berber |
| author_facet | Janssens, Wendy Kramer, Berber |
| author_sort | Janssens, Wendy |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Health shocks are among the most important unprotected risks for microfinance clients, but take-up of micro health insurance remains low. A framed field experiment with credit groups in Tanzania, eliciting demand for group versus individual insurance, attributes this to a social dilemma. In a context of joint liability, insurance is a public good because clients can rely on contributions from group members to cope with health shocks. We hypothesize that clients have a private incentive to free-ride and forgo individual insurance even when full enrollment optimizes group welfare. The binding nature of group insurance eliminates such free-riding. Our experiment yields substantial support for this hypothesis. Whereas the demand for group insurance is high, a substantial share of clients forgoes individual insurance and relies on peers to repay their loan when falling ill. Group insurance can potentially increase low take-up rates. |
| format | Journal Article |
| id | CGSpace148498 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2016 |
| publishDateRange | 2016 |
| publishDateSort | 2016 |
| publisher | Elsevier |
| publisherStr | Elsevier |
| record_format | dspace |
| spelling | CGSpace1484982025-04-24T19:52:56Z The social dilemma of microinsurance: Free-riding in a framed field experiment Janssens, Wendy Kramer, Berber microfinance health insurance public goods experiments risk Health shocks are among the most important unprotected risks for microfinance clients, but take-up of micro health insurance remains low. A framed field experiment with credit groups in Tanzania, eliciting demand for group versus individual insurance, attributes this to a social dilemma. In a context of joint liability, insurance is a public good because clients can rely on contributions from group members to cope with health shocks. We hypothesize that clients have a private incentive to free-ride and forgo individual insurance even when full enrollment optimizes group welfare. The binding nature of group insurance eliminates such free-riding. Our experiment yields substantial support for this hypothesis. Whereas the demand for group insurance is high, a substantial share of clients forgoes individual insurance and relies on peers to repay their loan when falling ill. Group insurance can potentially increase low take-up rates. 2016-03-25 2024-06-21T09:24:51Z 2024-06-21T09:24:51Z Journal Article https://hdl.handle.net/10568/148498 en Open Access Elsevier Janssens, Wendy; and Kramer, Berber. 2016. The social dilemma of microinsurance: Free-riding in a framed field experiment. Journal of Economic Behavior & Organization. Journal of Economic Behavior & Organization 131(Part B): 47 - 61. https://doi.org/10.1016/j.jebo.2016.03.003 |
| spellingShingle | microfinance health insurance public goods experiments risk Janssens, Wendy Kramer, Berber The social dilemma of microinsurance: Free-riding in a framed field experiment |
| title | The social dilemma of microinsurance: Free-riding in a framed field experiment |
| title_full | The social dilemma of microinsurance: Free-riding in a framed field experiment |
| title_fullStr | The social dilemma of microinsurance: Free-riding in a framed field experiment |
| title_full_unstemmed | The social dilemma of microinsurance: Free-riding in a framed field experiment |
| title_short | The social dilemma of microinsurance: Free-riding in a framed field experiment |
| title_sort | social dilemma of microinsurance free riding in a framed field experiment |
| topic | microfinance health insurance public goods experiments risk |
| url | https://hdl.handle.net/10568/148498 |
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