EconPapers    
Economics at your fingertips  
 

The demand for insurance against common shocks

Vianney Dequiedt (), Alain de Janvry () and Elisabeth Sadoulet ()

Post-Print from HAL

Abstract: In recent years, index-based insurance has been offered to smallholder farmers in the developingworld to protect against common shocks such as weather shocks. Despite their attractive properties, these products have met with low demand. We consider the frequent situation where farmers are members of groups with common interests. We show that this creates strategic interactions among group members in deciding to insure that reduce the demand for insurance for two reasons. One is free riding due to positive externalities on other group members when a member chooses to insure. The other is potential coordination failure because it may not be profitable for a risk-averse member to insure if the other members do not. As a consequence, we argue that the demand for insurance against common shocks could increase if the insurance policywere sold to groups rather than to individuals.

Keywords: Group insurance; Producer groups; Weather insurance (search for similar items in EconPapers)
Date: 2014
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00879617
References: Add references at CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed

Published in Journal of Development Economics, Elsevier, 2014, 106, pp.227-238

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: The demand for insurance against common shocks (2014) Downloads
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:hal:journl:halshs-00879617

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2019-06-20
Handle: RePEc:hal:journl:halshs-00879617