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Agricultural Insurance and Economic Development

Author

Listed:
  • Shawn A. Cole

    (Finance Unit, Harvard Business School, Boston, Massachusetts 02163)

  • Wentao Xiong

    (Department of Economics, Harvard University, Cambridge, Massachusetts 02138)

Abstract

This article provides a review of recent research on agricultural insurance (AI) in developing countries. Agricultural producers face a variety of significant risks; historically, only government-subsidized products have achieved widespread adoption. A recent contractual innovation, which links insurance payouts to realized weather rather than farmer indemnity, has spurred substantial research in the past decade. This review begins by describing the experience in developed economies and then turns to developing countries, covering the following topics: farmers' adoption of AI, how AI affects their decision to invest in risky assets, and the extent to which AI helps farmers smooth income and consumption. We conclude with suggestions for future research and practice related to AI in developing countries.

Suggested Citation

  • Shawn A. Cole & Wentao Xiong, 2017. "Agricultural Insurance and Economic Development," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 235-262, September.
    • Handle: RePEc:anr:reveco:v:9:y:2017:p:235-262
    DOI: 10.1146/annurev-economics-080315-015225
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    More about this item

    Keywords

    agricultural insurance; risk management; risky investment;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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