IDEAS home Printed from https://ideas.repec.org/p/ags/iaae15/211331.html
   My bibliography  Save this paper

Formal and informal insurance: experimental evidence from Ethiopia

Author

Listed:
  • Berhane, Guush
  • Dercon, Stefan
  • Hill, Ruth
  • Taffesse, Alemayehu

Abstract

We examine the impact of formal insurance and informal risk-sharing institutions on welfare, and the complementarity between these forms of formal and informal insurance. As in a number of other studies, formal rainfall index insurance was offered to farmers. However in this study support to local risk sharing institutions—iddirs—was also provided to strengthen the extent to which they were able to insure members against idiosyncratic shocks. Access to insurance and support to iddirs was randomized across villages during two agricultural seasons. Results show that formal insurance has a significant impact on encouraging productive investments, particularly investments in fertilizer, replicating the results found in Ghana in Karlan et al (2013). Strengthening risk-sharing through iddirs increases formal insurance demand (consistent with the results in Dercon et al 2013) and some welfare outcomes, but does not cause insurance to have any additional effect on productive outcomes. There is also some evidence that strengthening risk-sharing through local institutions reduces individual bilateral transfers.

Suggested Citation

  • Berhane, Guush & Dercon, Stefan & Hill, Ruth & Taffesse, Alemayehu, 2015. "Formal and informal insurance: experimental evidence from Ethiopia," 2015 Conference, August 9-14, 2015, Milan, Italy 211331, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae15:211331
    DOI: 10.22004/ag.econ.211331
    as

    Download full text from publisher

    File URL: http://ageconsearch.umn.edu/record/211331/files/Berhane-Formal%20and%20informal%20insurance-1062.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Taffesse, Alemayehu Seyoum & Dorosh, Paul A. & Gemessa, Sinafikeh Asrat, 2012. "Crop production in Ethiopia: Regional patterns and trends," IFPRI book chapters, in: Dorosh, Paul A. & Rashid, Shahidur (ed.),Food and agriculture in Ethiopia: Progress and policy challenges, chapter 3, International Food Policy Research Institute (IFPRI).
    2. Dercon, Stefan, 2004. "Growth and shocks: evidence from rural Ethiopia," Journal of Development Economics, Elsevier, vol. 74(2), pages 309-329, August.
    3. Uregia, Nigussie Tefera & Desta, Mulat Demeke & Rashid, Shahidur, 2012. "Welfare Impacts of Rising Food Prices in Rural Ethiopia: a Quadratic Almost Ideal Demand System Approach," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126261, International Association of Agricultural Economists.
    4. Dercon, Stefan & Hill, Ruth Vargas & Clarke, Daniel & Outes-Leon, Ingo & Seyoum Taffesse, Alemayehu, 2014. "Offering rainfall insurance to informal insurance groups: Evidence from a field experiment in Ethiopia," Journal of Development Economics, Elsevier, vol. 106(C), pages 132-143.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ceballos, F. & Kramer, B. & Robles, M., 2018. "The Feasibility of Picture-Based Crop Insurance (PBI): Smartphone Pictures for Affordable Crop Insurance," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277141, International Association of Agricultural Economists.
    2. Sibiko, Kenneth W. & Qaim, Matin, 2017. "Weather Index Insurance, Agricultural Input Use, and Crop Productivity in Kenya," GlobalFood Discussion Papers 256214, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.

    More about this item

    Keywords

    International Development; Risk and Uncertainty;

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ags:iaae15:211331. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/iaaeeea.html .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.