Women's Downside Risk Exposure as a Barrier to Agricultural Investment and Technology Adoption

As climate variability intensifies, smallholder households—especially women within those households—face growing exposure to weather-related shocks, increasing their vulnerability to uncompensated losses and consumption shortfalls. Index insurance has emerged as a scalable risk management tool, yet basis risk, i.e., the gap between farm-level losses and index-triggered payouts, undermines trust, limits insurance demand, and constrains impacts on well-being especially among women. To understand the gendered impacts of reducing basis risk, we ask whether uncompensated shocks resulting from basis risk might affect women more than men, by analyzing gender differences in coping with shocks. Female farmers have lower education levels, less land, lower food consumption scores, and less agency in decisions over household coping responses than male farmers. Shocks—especially damage to standing crops and illnesses within the household—are associated with a greater reduction in food consumption scores among women than among men. These descriptive patterns suggest that basis risk has more severe implications for women than men, offering an explanation for why lowering basis risk improves insurance demand and perceptions particularly among women farmers.