TY  - JA
AU  - Belissa,T.
AU  - Bulte,E.
AU  - Cecchi,F.
AU  - Gangopadhyay,S.
AU  - Lensink,R.
TI  - Liquidity constraints, informal institutions, and the adoption of weather insurance : : a randomized controlled Trial in Ethiopia
SN  - 0304-3878
PY  - 2019///
CY  - Amsterdam (Netherlands)
PB  - Elsevier
KW  - Agricultural insurance
KW  - AGROVOC
KW  - Liquidity
KW  - Ethiopia
N1  - Peer review
N2  - We report the results of a drought insurance experiment in Ethiopia, and examine whether uptake of index-based insurance is enhanced if we allow farmers to pay after harvest (addressing a liquidity constraint). We also test to what extent uptake can be enhanced by promoting insurance via informal risk-sharing institutions (Iddirs), to reduce trust and information problems. The delayed payment insurance product increases uptake substantially when compared to standard insurance, from 8% to 24%, and leveraging informal institutions results in even greater uptake (43%). We also find suggestive evidence that the delayed premium product is indeed better at targeting the liquidity constrained. However, default rates associated with delayed payments are relatively high and concentrated in a small number of Iddirs - potentially compromising the economic viability of the novel product. We discuss how default rates can be reduced
T2  - Journal of Development Economics
DO  - https://doi.org/10.1016/j.jdeveco.2019.06.006
ER  -