Insuring against the weather
Weather risk remains a major challenge to farming in poor countries that face frequent droughts. Recent evidence on index-based weather insurance points to low take-up rates largely due to basis risk (i.e. residual risk left uninsured by the index). Using randomized control trials, we study to what...
| Autores principales: | , , , , |
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| Formato: | Brief |
| Lenguaje: | Inglés |
| Publicado: |
International Food Policy Research Institute
2013
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/153388 |
| _version_ | 1855518224320299008 |
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| author | Berhane, Guush Clarke, Daniel J. Dercon, Stefan Hill, Ruth Vargas Taffesse, Alemayehu Seyoum |
| author_browse | Berhane, Guush Clarke, Daniel J. Dercon, Stefan Hill, Ruth Vargas Taffesse, Alemayehu Seyoum |
| author_facet | Berhane, Guush Clarke, Daniel J. Dercon, Stefan Hill, Ruth Vargas Taffesse, Alemayehu Seyoum |
| author_sort | Berhane, Guush |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Weather risk remains a major challenge to farming in poor countries that face frequent droughts. Recent evidence on index-based weather insurance points to low take-up rates largely due to basis risk (i.e. residual risk left uninsured by the index). Using randomized control trials, we study to what extent traditional groups can be utilized to mitigate basis risk by retailing insurance through these groups. We find that selling insurance through iddirs, with pre-defined sharing rules, increases take-up—suggesting that groups are better placed to reduce basis risk. We also find that insurance strengthens existing risk-sharing behavior within groups, for example, by improving access to loans from the iddir to cover crop losses and improving perceived ability to finance emergencies. Insurance has also improved household welfare in the short term considered in this study, albeit to a limited extent. |
| format | Brief |
| id | CGSpace153388 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2013 |
| publishDateRange | 2013 |
| publishDateSort | 2013 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1533882025-11-06T04:23:54Z Insuring against the weather Berhane, Guush Clarke, Daniel J. Dercon, Stefan Hill, Ruth Vargas Taffesse, Alemayehu Seyoum risk analysis weather drought insurance Weather risk remains a major challenge to farming in poor countries that face frequent droughts. Recent evidence on index-based weather insurance points to low take-up rates largely due to basis risk (i.e. residual risk left uninsured by the index). Using randomized control trials, we study to what extent traditional groups can be utilized to mitigate basis risk by retailing insurance through these groups. We find that selling insurance through iddirs, with pre-defined sharing rules, increases take-up—suggesting that groups are better placed to reduce basis risk. We also find that insurance strengthens existing risk-sharing behavior within groups, for example, by improving access to loans from the iddir to cover crop losses and improving perceived ability to finance emergencies. Insurance has also improved household welfare in the short term considered in this study, albeit to a limited extent. 2013 2024-10-01T13:56:03Z 2024-10-01T13:56:03Z Brief https://hdl.handle.net/10568/153388 en Open Access application/pdf International Food Policy Research Institute Berhane, Guush; Clarke, Daniel J.; Dercon, Stefan; Hill, Ruth Vargas; Taffesse, Alemayehu Seyoum 2013. Insuring against the weather. https://hdl.handle.net/10568/153388 |
| spellingShingle | risk analysis weather drought insurance Berhane, Guush Clarke, Daniel J. Dercon, Stefan Hill, Ruth Vargas Taffesse, Alemayehu Seyoum Insuring against the weather |
| title | Insuring against the weather |
| title_full | Insuring against the weather |
| title_fullStr | Insuring against the weather |
| title_full_unstemmed | Insuring against the weather |
| title_short | Insuring against the weather |
| title_sort | insuring against the weather |
| topic | risk analysis weather drought insurance |
| url | https://hdl.handle.net/10568/153388 |
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