The Impact of Insurance Provision on Households’ Production and Financial Decisions

Cai, Jing

The Impact of Insurance Provision on Households’ Production and Financial Decisions

MPRA Paper from University Library of Munich, Germany

Abstract: Taking advantage of a natural experiment and a rich household-level panel dataset, this paper tests the impact of an agricultural insurance program on household level production, borrowing, and saving. The empirical strategy includes both difference-in-difference and triple difference estimations. I find that, first, introducing insurance increases the production area of insured crops by around 20% and decreases production diversification; second, provision of insurance raises the credit demand by 25%; third, it decreases household saving by more than 30%; fourth, the effect of insurance on borrowing persists in the long-run, while the effect on saving is significant only in the medium-run; and fifth, the impact of insurance is greater on larger farmers and on households with lower migration remittance.

Keywords: Insurance; Production; Borrowing; Saving (search for similar items in EconPapers)
JEL-codes: D14 G21 G22 O16 Q12 (search for similar items in EconPapers)
Date: 2013-05-09
New Economics Papers: this item is included in nep-agr, nep-ias and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: The Impact of Insurance Provision on Household Production and Financial Decisions (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:46864

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