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STICERD Work in Progress Seminars

Access to information and weather insurance take-up: an empirical investigation

Laura Munro (Department of International Development, LSE)

Friday 27 June 2014 13:00 - 14:00

This event will take place online.

Many of our seminars and public events this year will continue as online seminars or as online and in person. Please check our website listings and Twitter feed @STICERD_LSE for updates.

Unless otherwise specified, current restrictions mean in-person seminars are only open to members of the LSE community (those with a valid LSE ID card).

Those unable to join the seminars in-person are welcome to participate via zoom.

About this event

The welfare of low-income agrarian households is severely constrained by risk. Weather index insurance was developed to help poor farmers address one of these risks: low crop yields from flood or drought. Yet, insurance take-up remains low. Drawing on a framed field experiment with smallholder farmers in Gujarat, India, this study provides insights into the explanatory role of one potentially powerful determinant of insurance take-up: access to information about peer purchasing decisions in the network. Three channels through which this information may influence decisions to purchase insurance are examined: (i) ex-ante informal risk sharing, (ii) ex-post informal risk sharing and (iii) herding. Experimental findings suggest that information about peer purchasing decisions constrains weather insurance take-up through ex-post informal transfers. There is also some evidence that herding behavior constrains take-up when peers have low willingness to pay. These findings highlight the heterogeneous effects of information sharing for farmer welfare.

This event will take place online.