Erschienen in:Tinbergen Institute Discussion Paper 12-145/V
Umfang:
1 Online-Ressource (76 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.2191972
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 9, 2015 erstellt
Beschreibung:
Health shocks are among the most important unprotected risks for microfinance clients, but the take-up of micro health insurance typically remains limited. This paper attributes low enrollment rates to a social dilemma. Our theory is that in jointly liable groups, insurance is a public good. Clients can rely on contributions from group members to cope with shocks. Less risk averse clients have a private incentive to free-ride and forgo individual insurance even when insurance optimizes group welfare. The binding nature of insurance offered at the group level eliminates such free-riding. A framed public good experiment in Tanzania, eliciting demand for group versus individual microinsurance, yields substantial support for this hypothesis. This provides a potential explanation for low take-up rates