Insurance and rural welfare: what can panel data tell us?
AbstractAssessing the scope for insurance in rural communities usually requires a structural model of household behaviour under risk. One of the few empirical applications of such models is the study by Rosenzweig and Wolpin (1993) who conclude that Indian farmers in the ICRISAT villages would not benefit from the introduction of formal weather insurance. In this article we investigate how models such as theirs can be estimated from panel data on production and assets. We show that if assets can take only a limited number of values the coefficients of the model cannot be estimated with reasonable precision. We also show that this can affect the conclusion that insurance would not be welfare improving.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 41 (2009)
Issue (Month): 24 ()
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Other versions of this item:
- Chris Elbersa & Jan Willem Gunning & Lei Pan, 2007. "Insurance and Rural Welfare: What Can Panel Data Tell Us?," CSAE Working Paper Series 2007-13, Centre for the Study of African Economies, University of Oxford.
- Chris Elbers, 2007. "Insurance and Rural Welfare: What Can Panel Data Tell Us?," Economics Series Working Papers WPS/2007-13, University of Oxford, Department of Economics.
- Chris Elbers & Jan Willem Gunning & Lei Pan, 2007. "Insurance and Rural Welfare: What can Panel Data tell us?," Tinbergen Institute Discussion Papers 07-011/2, Tinbergen Institute.
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
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