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Managing risk with insurance and savings : experimental evidence for male and female farm managers in the Sahel

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  • Delavallade, Clara
  • Dizon, Felipe
  • Hill, Ruth Vargas
  • Petraud, Jean Paul

Abstract

Although there is fast-growing policy interest in offering financial products to help rural households manage risk, the literature is still scant as to which products are the most effective. This paper uses a randomized field experiment in Senegal and Burkina Faso to compare male and female farmers who are offered index-based agricultural insurance with those who are offered a variety of savings instruments. The paper finds that female farm managers were less likely to purchase agricultural insurance and more likely to invest in savings for emergencies, even controlling for access to informal insurance and differences in crop choice. It is hypothesized that this finding results from the fact that, although men and women are equally exposed to yield risk, women face additional sources of lifecycle risk -- particularly health risks associated with fertility and childcare -- that men do not. In essence, the basis risk associated with agricultural insurance products is higher for women. Purchasing insurance increased input spending and use more than savings. Those who purchased more insurance realized higher average yields and were better able to manage food insecurity and shocks. This finding suggests that gender differences in demand for financial products can have an impact on productivity, resilience, and welfare.

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  • Delavallade, Clara & Dizon, Felipe & Hill, Ruth Vargas & Petraud, Jean Paul, 2015. "Managing risk with insurance and savings : experimental evidence for male and female farm managers in the Sahel," Policy Research Working Paper Series 7176, The World Bank.
  • Handle: RePEc:wbk:wbrwps:7176
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    Cited by:

    1. Delavallade, Clara & Godlonton, Susan, 2023. "Locking crops to unlock investment: Experimental evidence on warrantage in Burkina Faso," Journal of Development Economics, Elsevier, vol. 160(C).
    2. Ward, Patrick S. & Kumar, Neha & De Nicola, Francesca & Hill, Ruth & Makhija, Simrin & Spielman, David J. & Magnan, Nicholas, 2017. "Insuring Against Drought: Evidence on Agricultural Intensification and Demand for Index Insurance from a Randomized Evaluation in Rural Bangladesh," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258090, Agricultural and Applied Economics Association.
    3. Mayra Buvinic & Megan O’Donnell, 2017. "Gender Matters in Economic Empowerment Interventions: A Research Review - Working Paper 456," Working Papers 456, Center for Global Development.
    4. Hansen, James & Hellin, Jon & Rosenstock, Todd & Fisher, Eleanor & Cairns, Jill & Stirling, Clare & Lamanna, Christine & van Etten, Jacob & Rose, Alison & Campbell, Bruce, 2019. "Climate risk management and rural poverty reduction," Agricultural Systems, Elsevier, vol. 172(C), pages 28-46.
    5. Hill, Ruth Vargas & Kumar, Neha & Magnan, Nicholas & Makhija, Simrin & de Nicola, Francesca & Spielman, David J. & Ward, Patrick S., 2019. "Ex ante and ex post effects of hybrid index insurance in Bangladesh," Journal of Development Economics, Elsevier, vol. 136(C), pages 1-17.
    6. Mayra Buvinic & Megan O’Donnell, 2017. "Gender Matters in Economic Empowerment Interventions: A Research Review," Working Papers id:11926, eSocialSciences.
    7. Clara Delavallade, 2017. "Quality Health Care and Willingness to Pay for Health Insurance Retention: A Randomized Experiment in Kolkata Slums," Health Economics, John Wiley & Sons, Ltd., vol. 26(5), pages 619-638, May.
    8. Aheeyar, Mohamed & de Silva, Sanjiv & Senaratna Sellamuttu, Sonali & Arulingam, Indika, 2019. "Unpacking barriers to socially inclusive weather index insurance: towards a framework for inclusion," Papers published in Journals (Open Access), International Water Management Institute, pages 11(11):1-19.
    9. Kramer, Berber & Porter, Maria & Wassie Bizuayehu, Solomon, 2023. "Basis Risk, Social Comparison, Perceptions of Fairness and Demand for Insurance: A Field Experiment in Ethiopia," 2024 Allied Social Sciences Association (ASSA) Annual Meeting, January 5-7, 2024, San Antonio, Texas 339075, Agricultural and Applied Economics Association.
    10. Trestini, Samuel & Giampietri, Elisa & Smiglak-Krajewska, Magdalena, 2018. "Farmer behaviour towards the agricultural risk management tools provided by the CAP: a comparison between Italy and Poland," 162nd Seminar, April 26-27, 2018, Budapest, Hungary 271978, European Association of Agricultural Economists.
    11. Hill, Ruth Vargas & Kumar, Neha & Magnan, Nicholas & Makhija, Simrin & de Nicola, Francesca & Spielman, David J. & Ward, Patrick S., 2017. "Insuring against droughts: Evidence on agricultural intensification and index insurance demand from a randomized evaluation in rural Bangladesh," IFPRI discussion papers 1630, International Food Policy Research Institute (IFPRI).

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    More about this item

    Keywords

    Emerging Markets; Hazard Risk Management; Insurance&Risk Mitigation; Rural Poverty Reduction; Financial Intermediation;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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