Willingness-to-pay for microinsurance and flexibility: Evidence from an agricultural investment lab-in-the-field experiment in Senegal

Kristina Czura and Vianney Dequiedt ()

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: Agricultural insurance does not only affect investment decisions in agriculture but also in a secondary, unrelated income earning activity that can serve as a risk mitigation and risk coping strategy, such as livestock farming. The value of insurance may depend on the market environment in the investment market for livestock: with complete livestock markets, agricultural insurance may be less valuable; with seasonal livestock markets and non-flexible decision making environments, agricultural insurance becomes more valuable. Using data from a lab-in-the-field experiment with agricultural decision makers in rural Senegal we study the effects of agricultural insurance on investments in livestock with complete and seasonal livestock markets. In general, insurance increases investment in livestock farming. There is a widespread willingness to pay for insurance but it does not react to the size of the insurance coverage. The value of insurance is higher in inflexible investment decisions indicating that insurance is more valuable in non-flexible decision making environments, such as incomplete and seasonal markets.

JEL-codes: C93 O12 O16 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-agr, nep-exp, nep-ias and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/112993/1/VfS_2015_pid_366.pdf (application/pdf)

Related works:
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:zbw:vfsc15:112993

Access Statistics for this paper

More papers in VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().