• Media type: E-Book
  • Title: Barriers to household risk management : Evidence from India
  • Contributor: Cole, Shawn [Author]; Vickery, James [Other]; Tobacman, Jeremy [Other]; Topalova, Petia [Other]; Townsend, Robert [Other]; Cole, Shawn [Other]; Giné, Xavier [Other]
  • imprint: Washington, D.C: The World Bank, 2010
    2010
  • Extent: Online-Ressource (40 p)
  • Language: English
  • DOI: 10.1596/1813-9450-5504
  • Identifier:
  • Reproductino series: World Bank eLibrary
  • Origination:
  • Footnote:
  • Description: Why do many households remain exposed to large exogenous sources of non-systematic income risk? This paper uses a series of randomized field experiments in rural India to test the importance of price and non-price factors in the adoption of an innovative rainfall insurance product. The analysis finds that demand is significantly price-elastic, but that even if insurance were offered with payout ratios similar to US, widespread coverage would not be achieved. The paper identifies key non-price frictions that limit demand: liquidity constraints, particularly among poor households, lack of trust, and limited salience. The authors suggest potential improvements in contract design to mitigate these frictions