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Social Networks and the Decision to Insure

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

MPRA Paper from University Library of Munich, Germany

Abstract: Using data from a randomized experiment in rural China, this paper studies the influence of social networks on weather insurance adoption and the mechanisms through which social networks operate. To quantify network effects, the experiment offers intensive information sessions about the insurance 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 15% reduction in the insurance premium. By varying the information available about peers’ decisions and using randomized default options, the experiment shows that the network effect is driven by the diffusion of insurance knowledge rather than purchase decisions.

Keywords: Social network; Insurance demand; Learning (search for similar items in EconPapers)
JEL-codes: D12 D83 G22 O33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp, nep-ias, nep-ict, nep-net, nep-soc and nep-ure
Date: 2013-05-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27) Track citations by RSS feed

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Related works:
Journal Article: Social Networks and the Decision to Insure (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:46861

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