Social Networks and the Decision to Insure

Jing Cai, Alain de Janvry () and Elisabeth Sadoulet ()

American Economic Journal: Applied Economics, 2015, vol. 7, issue 2, 81-108

Abstract: Using data from a randomized experiment in rural China, we study the influence of social networks on weather insurance adoption and the mechanisms through which they operate. To quantify network effects, the experiment provides intensive information sessions about the product to a random subset of farmers. For untreated farmers, the effect of having an additional treated friend on take-up is equivalent to granting a 13 percent reduction in the insurance premium. By varying the information available about peers' decisions and randomizing default options, we show that the network effect is driven by the diffusion of insurance knowledge rather than purchase decisions. (JEL G22, O12, O16, P36, Q12, Q54, Z13)

JEL-codes: G22 O12 O16 P36 Q12 Q54 Z13 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/app.20130442
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (148)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/app.20130442 (application/pdf)
http://www.aeaweb.org/aej/app/data/0702/2013-0442_data.zip (application/zip)
http://www.aeaweb.org/aej/app/ds/0702/2013-0442_ds.zip (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Social Networks and the Decision to Insure (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:aea:aejapp:v:7:y:2015:i:2:p:81-108

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Applied Economics is currently edited by Alexandre Mas

More articles in American Economic Journal: Applied Economics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().