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The Effect of Microinsurance on Economic Activities: Evidence from a Randomized Field Experiment

Author

Listed:
  • Hongbin Cai

    (Peking University)

  • Yuyu Chen

    (Peking University)

  • Hanming Fang

    (University of Pennsylvania and NBER)

  • Li-An Zhou

    (Peking University)

Abstract

We report results from a large, randomized field to study how access to formal microinsurance affects production and economic development. We induce exogenous variation in insurance coverage at the village level by randomly assigning performance incentives to the village animal husbandry worker who is responsible for signing farmers up for the insurance. We find that promoting greater adoption of insurance significantly increases farmers' sow production, and this effect seems to persist in the longer run; moreover, the increase in sow production in response to the sow insurance does not seem to be the result of the substitution of other livestock. © 2015 The President and Fellows of Harvard College and the Massachusetts Institute of Technology

Suggested Citation

  • Hongbin Cai & Yuyu Chen & Hanming Fang & Li-An Zhou, 2015. "The Effect of Microinsurance on Economic Activities: Evidence from a Randomized Field Experiment," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 287-300, May.
  • Handle: RePEc:tpr:restat:v:97:y:2015:i:2:p:287-300
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    More about this item

    Keywords

    microinsurance; economic development; exogenous; animal husbandry; sow production;
    All these keywords.

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q19 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Other
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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