DEMAND FOR RAINFALL-INDEX BASED INSURANCE: A CASE STUDY FROM MOROCCO

Nancy McCarthy

No 16084, EPTD Discussion Papers from CGIAR, International Food Policy Research Institute (IFPRI)

Abstract: In this paper, we derive estimates for willingness to pay for rainfall-index based insurance contracts. Surveys were undertaken in four regions in Morocco, representing different mean and variability of rainfall conditions. Results indicate that respondents in the high variability regions preferred contracts that paid out more often (had higher rainfall trigger levels), and which were more costly. In fact, a strong majority of respondents indicated they would purchase these contracts at the fair-value price; the estimated median willingness to pay for such contracts was between 12-20 percent above the fair value contract. However, in the lower rainfall variability regions, the cheaper contracts with lower trigger values were the only contracts for which the estimated median willingness to pay was greater than the fair-value of the contract. Finally, estimated coefficients for explanatory variables such as human and physical assets, debt levels, etc. did not have consistent impacts, either across or within regions.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Pages: 25
Date: 2003
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/16084/files/ep030106.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:ags:eptddp:16084

DOI: 10.22004/ag.econ.16084

Access Statistics for this paper

More papers in EPTD Discussion Papers from CGIAR, International Food Policy Research Institute (IFPRI) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().