Statistical analysis of rainfall insurance payouts in southern India

Xavier Gine, Robert Townsend and James Vickery ()

No 4426, Policy Research Working Paper Series from The World Bank

Abstract: Using 40 years of historical rainfall data, this paper estimates a distribution for payouts on rainfall insurance policies offered to farmers in the State of Andhra Pradesh, India, in 2006. The authors find that the contracts primarily protect households against extreme tail events; half the expected value of indemnities paid by the insurance are generated by only 2 percent of rainfall realizations. Contract payouts are significantly correlatedcross-sectionally, and also inversely associated with real GDP growth. The paper discusses the implications of these findings for the potential benefits of insurance to households, the risks facing a financial institution underwriting rainfall insurance contracts, and pricing.

Keywords: Debt Markets; Deposit Insurance; Labor Policies; Emerging Markets (search for similar items in EconPapers)
Date: 2007-12-01
New Economics Papers: this item is included in nep-agr, nep-cwa, nep-dev and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (48)

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Related works:
Journal Article: Statistical Analysis of Rainfall Insurance Payouts in Southern India (2007)
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