Do Index Insurance Programs Live Up to Their Promises ? Aggregating Evidence from Multiple Experiments

Despite limited uptake, index insurance is often seen as one of the most remarkableinnovations of the past decades to help smallholder farmers manage risks. This paper uses a Bayesian hierarchical modelto aggregate evidence from existing experiments and assess the external validity of their results. The findings showpositive but highly heterogeneous responses to index insurance across experiments. Interventions expanding accessto index insurance typically boost productive investments by 0.06–0.11 standard deviation on average. However, treatmenteffects display substantial heterogeneity and there is no evidence that this heterogeneity can be meaningfullyexplained by basic household characteristics. The existing evidence base thus offers limited insights to predict theimpact of index insurance in new settings. The paper concludes that governments and development agencies shouldremain cautious before investing in the widespread expansion of index insurance.