IDEAS home Printed from https://ideas.repec.org/a/eee/deveco/v180y2026ics0304387825002093.html

Get in the zone: The risk-adjusted welfare effects of data-driven vs. administrative borders for index insurance zones

Author

Listed:
  • Kirchner, Ella
  • Benami, Elinor
  • Hobbs, Andrew
  • Carter, Michael R.
  • Jin, Zhenong

Abstract

Agricultural index insurance aims to protect producers from widespread shocks within defined areas, often based on administrative boundaries. However, these boundaries may poorly reflect yield variation, imposing costs on both policyholders and the public. Advances in geospatial data accessibility and clustering techniques offer potential to define more homogeneous insurance zones. This study evaluates the impact of redrawing zone boundaries based on observed agri-environmental conditions in western Kenya. Using over 13,000 crop cut observations with satellite-based estimates on growing conditions, we assess how data-driven zones affect producer welfare in a simulated area-yield index insurance program. While some data-driven zones modestly improve risk reduction with a fixed number of zones, greater flexibility in zone number and field sampling intensity offers more potential to balance performance and cost. We present a conceptual model and empirical simulations to characterize how zone design and data collection intensity jointly shape insurance outcomes in resource-constrained settings.

Suggested Citation

  • Kirchner, Ella & Benami, Elinor & Hobbs, Andrew & Carter, Michael R. & Jin, Zhenong, 2026. "Get in the zone: The risk-adjusted welfare effects of data-driven vs. administrative borders for index insurance zones," Journal of Development Economics, Elsevier, vol. 180(C).
    • Handle: RePEc:eee:deveco:v:180:y:2026:i:c:s0304387825002093
    DOI: 10.1016/j.jdeveco.2025.103658
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304387825002093
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jdeveco.2025.103658?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G52 - Financial Economics - - Household Finance - - - Insurance
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:180:y:2026:i:c:s0304387825002093. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/devec .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.