scholarly journals Dynamics of Demand for Index Insurance: Evidence from a Long-Run Field Experiment

2014 ◽  
Vol 104 (5) ◽  
pp. 284-290 ◽  
Author(s):  
Shawn Cole ◽  
Daniel Stein ◽  
Jeremy Tobacman
Keyword(s):  
Risk Management ◽  
Field Experiment ◽  
Spillover Effect ◽  
Small Samples ◽  
Index Insurance ◽  
Recent Experience ◽  
Insurance Demand ◽  
Rainfall Index ◽  
Long Run ◽  
Management Technology

This paper estimates how experimentally-manipulated experiences with a novel financial product, rainfall index insurance, affect subsequent insurance demand. Using a seven-year panel, we develop three main findings. First, recent experience matters for demand, consistent with overinference from small samples. Second, spillovers also matter, in the sense that the recent payout experience of village co-residents affects insurance demand about as much as one's own recent payout experience. Third, the spillover effect decays as time passes while the effect of one's own experience does not. We discuss implications of this analysis for commercial sustainability of this complicated but promising risk management technology.

scholarly journals Farmers’ Demand for Informal Risk Management Strategy and Weather Index Insurance: Evidence from China

2021 ◽  
Author(s):  
Yingmei Tang ◽  
Huifang Cai ◽  
Rongmao Liu
Keyword(s):  
Risk Management ◽  
Field Experiments ◽  
Management Strategies ◽  
Insurance Companies ◽  
Index Insurance ◽  
Insurance Demand ◽  
Weather Index ◽  
Weather Index Insurance ◽  
Risk Management Strategies ◽  
The Government

AbstractIn the absence of formal risk management strategies, agricultural production in China is highly vulnerable to climate change. In this study, field experiments were conducted with 344 households in Heilongjiang (Northeast China) and Jiangsu (East China) Provinces. Probit and logistic models and independent sample T-test were used to explore farmers’ demand for weather index insurance, in contrast to informal risk management strategies, and the main factors that affect demand. The results show that the farmers prefer weather index insurance to informal risk management strategies, and farmers’ characteristics have significant impacts on their adoption of risk management strategies. The variables non-agricultural labor ratio, farmers’ risk perception, education, and agricultural insurance purchase experience significantly affect farmers’ weather index insurance demand. The regression results show that the farmers’ weather index insurance demand and the influencing factors in the two provinces are different. Farmers in Heilongjiang Province have a higher participation rate than those in Jiangsu Province. The government should conduct more weather index insurance pilot programs to help farmers understand the mechanism, and insurance companies should provide more types of weather index insurance to meet farmers’ diversified needs.

Climate change and index insurance demand: Evidence from a framed field experiment in Tanzania

2020 ◽  
Vol 175 ◽  
pp. 155-184
Author(s):  
John P. Dougherty ◽  
Jon Einar Flatnes ◽  
Richard A. Gallenstein ◽  
Mario J. Miranda ◽  
Abdoul G. Sam
Keyword(s):  
Climate Change ◽  
Field Experiment ◽  
Index Insurance ◽  
Insurance Demand ◽  
Framed Field Experiment

RAINFALL-INDEX INSURANCE AND TECHNOLOGY ADOPTION: EVIDENCE FROM FIELD EXPERIMENT IN TUNISIA

2013 ◽  
Vol 25 (5) ◽  
pp. 660-673 ◽  
Author(s):  
Noujeima Ragoubi ◽  
Lotfi Belkacem ◽  
Anouar Ben Mimoun
Keyword(s):  
Technology Adoption ◽  
Field Experiment ◽  
Index Insurance ◽  
Rainfall Index

scholarly journals Designing Rainfall Index Insurance for Rubber Plantation in Balikpapan

2021 ◽  
Vol 1863 (1) ◽  
pp. 012018
Author(s):  
Muhammad Azka ◽  
Fauziyyah ◽  
Primadina Hasanah ◽  
Syalam Ali Wira Dinata
Keyword(s):  
Index Insurance ◽  
Rubber Plantation ◽  
Rainfall Index

Stock Market Development And Economic Growth in Nigeria

1998 ◽  
Vol 2 (1) ◽  
pp. 33-38 ◽  
Author(s):  
John C. Anyanwu
Keyword(s):  
Economic Growth ◽  
Risk Management ◽  
Stock Market ◽  
Conceptual Framework ◽  
Corporate Control ◽  
Market Development ◽  
Political Environment ◽  
Stock Market Development ◽  
Long Run

Is the stock market development important for economic growth in Nigeria? One line of research argues that it is not; another line stresses the importance of stock market development in allocating capital, acquisition of information about firms, easing risk management, mobilization of savings, and exerting corporate control. Indeed, some theories provide a conceptual framework for the belief that larger, more efficient stock markets boost economic growth. This article examines whether there is a strong empirical association between Nigerian stock market development and long-run economic growth. Our empirical results suggest that the Nigerian stock market development is positively and strongly associated with long-term economic growth. This implies that Nigerian policymakers should make concerted efforts at removing obstacles to stock market development while creating and sustaining an enabling macroeconomic and political environment for the market’s development.

Evaluating effectiveness of rainfall index insurance

2018 ◽  
Vol 78 (5) ◽  
pp. 611-625 ◽  
Author(s):  
Rui Zhou ◽  
Johnny Siu-Hang Li ◽  
Jeffrey Pai
Keyword(s):  
Crop Yield ◽  
Variance Reduction ◽  
Index Insurance ◽  
Corn Yield ◽  
Basis Risk ◽  
Content Type ◽  
Optimal Insurance ◽  
Rainfall Index ◽  
Temperature And Precipitation ◽  
Insurance Portfolio

Purpose The purpose of this paper is to examine the reduction of crop yield uncertainty using rainfall index insurances. The insurance payouts are determined by a transparent rainfall index rather than actual crop yield of any producer, thereby circumventing problems of adverse selection and moral hazard. The authors consider insurances on rainfall indexes of various months and derive an optimal insurance portfolio that minimizes the income variance for a crop producer. Design/methodology/approach Various regression models are considered to relate crop yield to monthly mean temperature and monthly cumulative precipitation. A bootstrapping method is used to simulate weather indexes and corn yield in a future year with the correlation between precipitation and temperature incorporated. Based on the simulated scenarios, the optimal insurance portfolio that minimizes the income variance for a crop producer is obtained. In addition, the impact of correlation between temperature and precipitation, availability of temperature index insurance and geographical basis risk on the effectiveness of rainfall index insurance is examined. Findings The authors illustrate the approach with the corn yield in Illinois east crop reporting district and weather data of a city in the same district. The analysis shows that corn yield in this district is negatively influenced by excessive precipitation in May and drought in June–August. Rainfall index insurance portfolio can reduce the income variance by up to 51.84 percent. Failing to incorporate the correlation between temperature and precipitation decreases variance reduction by 11.6 percent. The presence of geographical basis risk decreases variance reduction by a striking 24.11 percent. Allowing for the purchase of both rainfall and temperature index insurances increases variance reduction by 13.67 percent. Originality/value By including precipitation shortfall into explanatory variables, the extended crop yield model explains more fluctuation in crop yield than existing models. The authors use a bootstrapping method instead of complex parametric models to simulate weather indexes and crop yield for a future year and assess the effectiveness of rainfall index insurance. The optimal insurance portfolio obtained provides insights on the practical development of rainfall insurance for corn producers, from the selection of triggering index to the demand of the insurance.

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