How does risk management influence production decisions? evidence from a field experiment

Shawn A. Cole, Xavier Gine and James Vickery ()

No 6546, Policy Research Working Paper Series from The World Bank

Abstract: Weather is a key source of income risk, especially in emerging market economies. This paper uses a randomized controlled trial involving Indian farmers to study how an innovative rainfall insurance product affects production decisions. The authors find that insurance provision induces farmers to invest more in higher-return but rainfall-sensitive cash crops, particularly among educated farmers. This shift in behavior occurs ex ante, when realized monsoon rainfall is still uncertain. The results suggest that financial innovation can mitigate the real effects of uninsured production risk.

Keywords: Labor Policies; Insurance Law; Debt Markets; Non Bank Financial Institutions; Climate Change Economics (search for similar items in EconPapers)
Date: 2013-07-01
New Economics Papers: this item is included in nep-agr, nep-exp, nep-ias, nep-mfd and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

Downloads: (external link)
http://documents.worldbank.org/curated/en/285431468330274651/pdf/WPS6546.pdf (application/pdf)

Related works:
Journal Article: How Does Risk Management Influence Production Decisions? Evidence from a Field Experiment (2017)
Working Paper: How does risk management influence production decisions? evidence from a field experiment (2014)
Working Paper: How Does Risk Management Influence Production Decisions? Evidence From a Field Experiment (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:6546

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().