An experiment on the impact of weather shocks and insurance on risky investment
We conduct a framed field experiment in rural Ethiopia to test the seminal hypothesis that insurance provision induces farmers to take greater, yet profitable, risks. Farmers participated in a game protocol in which they were asked to make a simple decision: whether to purchase fertilizer, and if so...
| Autores principales: | , |
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| Formato: | Artículo preliminar |
| Lenguaje: | Inglés |
| Publicado: |
International Food Policy Research Institute
2010
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/152659 |
| _version_ | 1855527397747589120 |
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| author | Hill, Ruth Vargas Viceisza, Angelino |
| author_browse | Hill, Ruth Vargas Viceisza, Angelino |
| author_facet | Hill, Ruth Vargas Viceisza, Angelino |
| author_sort | Hill, Ruth Vargas |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | We conduct a framed field experiment in rural Ethiopia to test the seminal hypothesis that insurance provision induces farmers to take greater, yet profitable, risks. Farmers participated in a game protocol in which they were asked to make a simple decision: whether to purchase fertilizer, and if so, how many bags. The return to fertilizer was dependent on a stochastic weather draw made in each round of the game protocol. In later rounds of the game protocol, a random selection of farmers made this decision in the presence of a stylized weather-index insurance contract. Insurance was found to have some positive effect on fertilizer purchases. Purchases were also found to depend on the realization of the weather in the previous round. We explore the mechanisms of this relationship and find that it may be the result of both changes in wealth weather brings about and changes in perceptions of the costs and benefits of fertilizer purchases. |
| format | Artículo preliminar |
| id | CGSpace152659 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2010 |
| publishDateRange | 2010 |
| publishDateSort | 2010 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1526592025-11-06T06:26:29Z An experiment on the impact of weather shocks and insurance on risky investment Hill, Ruth Vargas Viceisza, Angelino insurance inputs field experimentation uncertainty investment We conduct a framed field experiment in rural Ethiopia to test the seminal hypothesis that insurance provision induces farmers to take greater, yet profitable, risks. Farmers participated in a game protocol in which they were asked to make a simple decision: whether to purchase fertilizer, and if so, how many bags. The return to fertilizer was dependent on a stochastic weather draw made in each round of the game protocol. In later rounds of the game protocol, a random selection of farmers made this decision in the presence of a stylized weather-index insurance contract. Insurance was found to have some positive effect on fertilizer purchases. Purchases were also found to depend on the realization of the weather in the previous round. We explore the mechanisms of this relationship and find that it may be the result of both changes in wealth weather brings about and changes in perceptions of the costs and benefits of fertilizer purchases. 2010 2024-10-01T13:55:05Z 2024-10-01T13:55:05Z Working Paper https://hdl.handle.net/10568/152659 en https://doi.org/10.1007/s10683-011-9303-7 Open Access application/pdf International Food Policy Research Institute Hill, Ruth Vargas; Viceisza, Angelino. 2010. An experiment on the impact of weather shocks and insurance on risky investment. IFPRI Discussion Paper 974. https://hdl.handle.net/10568/152659 |
| spellingShingle | insurance inputs field experimentation uncertainty investment Hill, Ruth Vargas Viceisza, Angelino An experiment on the impact of weather shocks and insurance on risky investment |
| title | An experiment on the impact of weather shocks and insurance on risky investment |
| title_full | An experiment on the impact of weather shocks and insurance on risky investment |
| title_fullStr | An experiment on the impact of weather shocks and insurance on risky investment |
| title_full_unstemmed | An experiment on the impact of weather shocks and insurance on risky investment |
| title_short | An experiment on the impact of weather shocks and insurance on risky investment |
| title_sort | experiment on the impact of weather shocks and insurance on risky investment |
| topic | insurance inputs field experimentation uncertainty investment |
| url | https://hdl.handle.net/10568/152659 |
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