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The impact of trust, risk and disaster exposure on microinsurance demand: Results of a DCE analysis in Cambodia

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  • Fiala, Oliver
  • Wende, Danny

Abstract

Natural disasters are increasing in frequency and intensity and have devastating impacts on individuals, both humanitarian and economic, particularly in developing countries. Microinsurance is seen as one promising instrument of disaster risk management, however the level of demand for respective projects remains low. Using behavioural games and a discrete choice experiment, this paper analyses the demand for hypothetical microinsurance products in rural Cambodia and contributes significant household level evidence to the current research. A general preference for microinsurance can be found, with demand significantly affected by price, provider, requirements for prevention and combinations with credit. Furthermore, financial literacy, risk aversion, levels of trust and previous disaster experience impact the individual demand for flood insurance in rural Cambodia.

Suggested Citation

  • Fiala, Oliver & Wende, Danny, 2016. "The impact of trust, risk and disaster exposure on microinsurance demand: Results of a DCE analysis in Cambodia," Dresden Discussion Paper Series in Economics 01/16, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    • Handle: RePEc:zbw:tuddps:0116
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    References listed on IDEAS

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    Cited by:

    1. Adloff, Susann & Rehdanz, Katrin, 2023. "Wait and see? Public preferences for the temporal effectiveness of coastal protection," Ecological Economics, Elsevier, vol. 204(PA).

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    More about this item

    Keywords

    microinsurance; trust; risk; discrete choice experiment; Cambodia;
    All these keywords.

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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