Microinsurance, Trust and Economic Development: Evidence from a Randomized Natural Field Experiment

Hongbin Cai (), Yuyu Chen, Hanming Fang and Li-An Zhou

No 15396, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We report results from a large randomized natural field experiment conducted in southwestern China in the context of insurance for sows. Our study sheds light on two important questions about microinsurance. First, how does access to formal insurance affect farmers' production decisions? Second, what explains the low takeup rate of formal insurance, despite substantial premium subsidy from the government? We find that providing access to formal insurance significantly increases farmers' tendency to raise sows. We argue that this finding also suggests that farmers are not previously insured efficiently through informal mechanisms. We also provide several pieces of evidence suggesting that trust, or lack thereof, for government-sponsored insurance products is a significant barrier for farmers' willingness to participate in the insurance program.

JEL-codes: C93 O12 O16 (search for similar items in EconPapers)
Date: 2009-10
New Economics Papers: this item is included in nep-cna, nep-dev, nep-exp, nep-ias, nep-mfd and nep-tra
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (79)

Downloads: (external link)
http://www.nber.org/papers/w15396.pdf (application/pdf)

Related works:
Working Paper: Microinsurance, Trust and Economic Development: Evidence from a Randomized Natural Field Experiment (2009)
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:nbr:nberwo:15396

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w15396

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().