Adoption of weather index insurance: Learning from willingness to pay among a panel of households in rural Ethiopia
In this paper we examine which farmers would be early entrants into weather index insurance markets in Ethiopia, were such markets to develop on a large scale. We do this by examining the determinants of willingness to pay for weather insurance among 1,400 Ethiopian households that have been tracked for 15 years as part of the Ethiopia Rural Household Survey. This provides both historical and current information with which to assess the determinants of demand. We find that educated, rich, and proactive individuals were more likely to purchase insurance. Risk aversion was associated with low insurance take-up, suggesting that models of technology adoption can inform the purchase and spread of weather index insurance. We also assess how willingness to pay varied as two key characteristics of the contract were varied and find that basis risk reduced demand for insurance, particularly when the price of the contract was high, and that provision of insurance through groups was preferred by women and individuals with lower levels of education.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.ifpri.org/Email:
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dercon, Stefan & De Weerdt, Joachim & Bold, Tessa & Pankhurst, Alula, 2006.
"Group-based funeral insurance in Ethiopia and Tanzania,"
Elsevier, vol. 34(4), pages 685-703, April.
- Stefan Dercon & Tessa Bold, 2004. "Group-based Funeral Insurance in Ethiopia and Tanzania," Economics Series Working Papers WPS/2004-27, University of Oxford, Department of Economics.
- Stefan Dercon & Tessa Bold & Joachim De Weerdt & Alula Pankhurst, 2004. "Group-based Funeral Insurance in Ethiopia and Tanzania," CSAE Working Paper Series 2004-27, Centre for the Study of African Economies, University of Oxford.
- Harold Alderman & John Hoddinott & Bill Kinsey, 2006.
"Long term consequences of early childhood malnutrition,"
Oxford Economic Papers,
Oxford University Press, vol. 58(3), pages 450-474, July.
- Harold Alderman & John Hoddinott & Bill Kinsey, 2004. "Long Term Consequences Of Early Childhood Malnutrition," HiCN Working Papers 09, Households in Conflict Network.
- Alderman,Harold & Hoddinott, John & Kinsey, Bill, 2003. "Long-term consequences of early childhood malnutrition," FCND briefs 168, International Food Policy Research Institute (IFPRI).
- Alderman,Harold & Hoddinott, John & Kinsey, Bill, 2003. "Long-term consequences of early childhood malnutrition," FCND discussion papers 168, International Food Policy Research Institute (IFPRI).
- Hans Binswanger, 1980. "Attitudes toward risk: Experimental measurement in rural india," Artefactual Field Experiments 00009, The Field Experiments Website.
- Stefan Dercon, 2003.
"Growth and Shocks: evidence from rural Ethiopia,"
Economics Series Working Papers
WPS/2003-12, University of Oxford, Department of Economics.
- Petia Topalova & Shawn Cole & Xavier Gene & Jeremy Tobacman & Robert Townsend & James Vickery, 2011.
"Barriers to Household Risk Management: Evidence from India,"
- Shawn Cole & Xavier Gine & Jeremy Tobacman & Petia Topalova & Robert Townsend & James Vickery, 2013. "Barriers to Household Risk Management: Evidence from India," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 104-35, January.
- Shawn Cole & Xavier Giné & Jeremy Tobacman & Petia Topalova & Robert Townsend & James Vickery, 2009. "Barriers to household risk management: evidence from India," Staff Reports 373, Federal Reserve Bank of New York.
- Cole, Shawn & Gine, Xavier & Tobacman, Jeremy & Topalova, Petia & Townsend, Robert & Vickery, James, 2010. "Barriers to household risk management : evidence from India," Policy Research Working Paper Series 5504, The World Bank.
- Robert M. Townsend & Shawn Cole & Jeremy Tobacman & Xavier Gine & James Ian Vickery & Petia Topalova, 2012. "Barriers to Household Risk Management; Evidence from India," IMF Working Papers 12/195, International Monetary Fund.
- Ruth Vargas Hill, 2009. "Using Stated Preferences and Beliefs to Identify the Impact of Risk on Poor Households," Journal of Development Studies, Taylor & Francis Journals, vol. 45(2), pages 151-171.
- Xavier Giné & Robert Townsend & James Vickery, 2007.
"Patterns of rainfall insurance participation in rural India,"
302, Federal Reserve Bank of New York.
- Xavier Giné & Robert Townsend & James Vickery, 2008. "Patterns of Rainfall Insurance Participation in Rural India," World Bank Economic Review, World Bank Group, vol. 22(3), pages 539-566, October.
- Gine, Xavier & Townsend, Robert & Vickery, James, 2007. "Patternsof rainfall insurance participation in rural India," Policy Research Working Paper Series 4408, The World Bank.
- Bliss, C. J. & Stern, N. H., 1982. "Palanpur: The Economy of an Indian Village," OUP Catalogue, Oxford University Press, number 9780198284192.
- Townsend, Robert M, 1995. "Financial Systems in Northern Thai Villages," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1011-46, November.
- Hill, Ruth Vargas & Robles, Miguel, 2011. "Flexible insurance for heterogeneous farmers: Results from a small-scale pilot in Ethiopia," IFPRI discussion papers 1092, International Food Policy Research Institute (IFPRI).
- Conley, T.G. & Udry, C.R., 2000.
"Learning about a New Technology: Pineapple in Ghana,"
817, Yale - Economic Growth Center.
- Timothy G. Conley & Christopher R. Udry, 2005. "Learning about a new technology: pineapple in Ghana," Proceedings, Federal Reserve Bank of San Francisco.
- Timothy G. Conley & Christopher R. Udry, 2010. "Learning about a New Technology: Pineapple in Ghana," American Economic Review, American Economic Association, vol. 100(1), pages 35-69, March.
- Gine, Xavier & Yang, Dean, 2007.
"Insurance, credit, and technology adoption : field experimental evidence from Malawi,"
Policy Research Working Paper Series
4425, The World Bank.
- Gin, Xavier & Yang, Dean, 2009. "Insurance, credit, and technology adoption: Field experimental evidencefrom Malawi," Journal of Development Economics, Elsevier, vol. 89(1), pages 1-11, May.
- Fafchamps, Marcel & Pender, John, 1997. "Precautionary Saving, Credit Constraints, and Irreversible Investment: Theory and Evidence from Semiarid India," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(2), pages 180-94, April.
- Feder, Gershon & Just, Richard E & Zilberman, David, 1985. "Adoption of Agricultural Innovations in Developing Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 255-98, January.
- Daniel Clarke & Sefan Dercon, 2009. "Insurance, Credit and Safety Nets for the Poor in a World of Risk," Working Papers 81, United Nations, Department of Economics and Social Affairs.
- Lybbert, Travis J. & Galarza, Francisco B. & McPeak, John G. & Barrett, Christopher B. & Boucher, Stephen R. & Carter, Michael R. & Chantarat, Sommarat & Fadlaoui, Aziz & Mude, Andrew G., 2010. "Dynamic Field Experiments in Development Economics: Risk Valuation in Morocco, Kenya, and Peru," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(2), April.
- Steffen Andersen & Glenn W. Harrison & Morten I. Lau & E. Elisabet Rutström, 2008. "Eliciting Risk and Time Preferences," Econometrica, Econometric Society, vol. 76(3), pages 583-618, 05.
- Doherty, Neil A & Schlesinger, Harris, 1990. "Rational Insurance Purchasing: Consideration of Contract Nonperformance," The Quarterly Journal of Economics, MIT Press, vol. 105(1), pages 243-53, February.
- Adesina, Akinwumi A. & Baidu-Forson, Jojo, 1995. "Farmers' perceptions and adoption of new agricultural technology: evidence from analysis in Burkina Faso and Guinea, West Africa," Agricultural Economics, Blackwell, vol. 13(1), pages 1-9, October.
When requesting a correction, please mention this item's handle: RePEc:fpr:ifprid:1088. 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: ()
If references are entirely missing, you can add them using this form.