Publication:
Insurance, Credit, and Technology Adoption : Field Experimental Evidence from Malawi

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dc.contributor.authorYang, Dean
dc.contributor.authorGiné, Xavier
dc.date.accessioned2012-06-08T21:50:26Z
dc.date.available2012-06-08T21:50:26Z
dc.date.issued2007-12
dc.description.abstractThe adoption of new agricultural technologies may be discouraged because of their inherent riskiness. This study implemented a randomized field experiment to ask whether the provision of insurance against a major source of production risk induces farmers to take out loans to invest in a new crop variety. The study sample was composed of roughly 800 maize and groundnut farmers in Malawi, where by far the dominant source of production risk is the level of rainfall. We randomly selected half of the farmers to be offered credit to purchase high-yielding hybrid maize and improved groundnut seeds for planting in the November 2006 crop season. The other half of the farmers were offered a similar credit package but were also required to purchase (at actuarially fair rates) a weather insurance policy that partially or fully forgave the loan in the event of poor rainfall. Surprisingly, take up was lower by 13 percentage points among farmers offered insurance with the loan. Take-up was 33.0 percent for farmers who were offered the uninsured loan. There is suggestive evidence that the reduced take-up of the insured loan was due to the high cognitive cost of evaluating the insurance: insured loan take-up was positively correlated with farmer education levels. By contrast, the take-up of the uninsured loan was uncorrelated with farmer education.en
dc.identifierhttp://documents.worldbank.org/curated/en/2007/12/8828562/insurance-credit-technology-adoption-field-experimental-evidence-malawi
dc.identifier.urihttps://hdl.handle.net/10986/7611
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper; No. 4425
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectACCESS TO CAPITAL
dc.subjectACCESS TO CREDIT
dc.subjectACCESS TO INFORMATION
dc.subjectADVERTISEMENTS
dc.subjectAGRICULTURAL ACTIVITIES
dc.subjectAGRICULTURAL HOUSEHOLD MODEL
dc.subjectAGRICULTURAL LABOR
dc.subjectAGRICULTURAL PRODUCTION
dc.subjectAGRICULTURAL PRODUCTIVITY
dc.subjectAVERAGE YIELDS
dc.subjectBANK POLICY
dc.subjectBANKS
dc.subjectBEHAVIORAL ECONOMICS
dc.subjectBORROWER
dc.subjectBORROWING
dc.subjectCOLLATERAL
dc.subjectCOMMODITY
dc.subjectCOMMODITY RISK MANAGEMENT
dc.subjectCONSUMER
dc.subjectCONSUMER RESEARCH
dc.subjectCONSUMERS
dc.subjectCONSUMPTION SMOOTHING
dc.subjectCORN
dc.subjectCOTTON
dc.subjectCREDIT CONSTRAINTS
dc.subjectCREDIT MARKET
dc.subjectCREDIT MARKET FAILURE
dc.subjectCREDIT MARKETS
dc.subjectCREDIT PROGRAM
dc.subjectCROP
dc.subjectCROP LOSS
dc.subjectCROP PRODUCTION
dc.subjectCROP VARIETIES
dc.subjectCROPPING
dc.subjectCROPS
dc.subjectCULTIVATION
dc.subjectCULTIVATION PRACTICES
dc.subjectDEBT
dc.subjectDEFAULT COSTS
dc.subjectDEMAND FOR CREDIT
dc.subjectDEPOSIT
dc.subjectDEVELOPING COUNTRIES
dc.subjectDROUGHT
dc.subjectDUMMY VARIABLE
dc.subjectDUMMY VARIABLES
dc.subjectECONOMIC ANALYSIS
dc.subjectECONOMIC DEVELOPMENT
dc.subjectEDUCATION LEVELS
dc.subjectEQUIPMENT
dc.subjectEXPENDITURE
dc.subjectFAIR PRICE
dc.subjectFARM
dc.subjectFARM INCOME
dc.subjectFARMER
dc.subjectFARMERS
dc.subjectFARMING
dc.subjectFARMS
dc.subjectFERTILIZER
dc.subjectFERTILIZER USE
dc.subjectFIELD TRIALS
dc.subjectFINANCIAL CONSTRAINTS
dc.subjectFINANCIAL INNOVATIONS
dc.subjectFINANCIAL MARKET
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL PRODUCTS
dc.subjectFINANCIAL SUPPORT
dc.subjectFUTURE CREDIT
dc.subjectGENDER
dc.subjectGOVERNMENT INTERVENTIONS
dc.subjectGREEN REVOLUTION
dc.subjectGROUNDNUT
dc.subjectGROUNDNUT PRODUCTION
dc.subjectHOLDINGS
dc.subjectHOUSEHOLD INCOME
dc.subjectHOUSEHOLDS
dc.subjectHUMAN CAPITAL
dc.subjectHYBRID SEED
dc.subjectHYBRID SEEDS
dc.subjectINCOME
dc.subjectINCOME TAX
dc.subjectINCOME VARIABILITY
dc.subjectINCOME-GENERATING ACTIVITIES
dc.subjectINCOMES
dc.subjectINFORMATIONAL ASYMMETRIES
dc.subjectINNOVATION
dc.subjectINSURANCE
dc.subjectINSURANCE COMPANIES
dc.subjectINSURANCE COMPANY
dc.subjectINSURANCE CONTRACT
dc.subjectINSURANCE MARKETS
dc.subjectINSURANCE POLICIES
dc.subjectINSURANCE POLICY
dc.subjectINSURANCE PREMIUM
dc.subjectINSURANCE PRODUCT
dc.subjectINTEREST PAYMENT
dc.subjectINTEREST RATE
dc.subjectINTERNATIONAL BANK
dc.subjectINTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
dc.subjectINVESTING
dc.subjectIRA
dc.subjectIRA CONTRIBUTIONS
dc.subjectLABOR DEMAND
dc.subjectLABOR MARKETS
dc.subjectLACK OF ACCESS
dc.subjectLAND OWNERSHIP
dc.subjectLANDHOLDERS
dc.subjectLENDER
dc.subjectLENDERS
dc.subjectLIABILITY
dc.subjectLIGHTING
dc.subjectLIMITED ACCESS
dc.subjectLIQUID WEALTH
dc.subjectLOAN
dc.subjectLOAN AMOUNT
dc.subjectLOAN PRODUCT
dc.subjectLOAN TERMS
dc.subjectLOANS TO FARMERS
dc.subjectMAIZE
dc.subjectMAIZE PRODUCTION
dc.subjectMARKETING
dc.subjectMARKETING EFFORTS
dc.subjectMICROFINANCE
dc.subjectMICROFINANCE INSTITUTIONS
dc.subjectMIDDLE-INCOME FAMILIES
dc.subjectNEGATIVE INCOME SHOCK
dc.subjectNONPAYMENT
dc.subjectPENSION
dc.subjectPENSION INCOME
dc.subjectPEOPLES
dc.subjectPESTICIDE
dc.subjectPLANTING
dc.subjectPOLITICAL ECONOMY
dc.subjectPOOR FARMER
dc.subjectPOSITIVE COEFFICIENTS
dc.subjectPREMIUM PAYMENT
dc.subjectPROBABILITIES
dc.subjectPROBABILITY
dc.subjectPRODUCTIVITY
dc.subjectPUBLIC POLICY
dc.subjectREMITTANCES
dc.subjectREPAYMENT
dc.subjectRESEARCH ASSISTANCE
dc.subjectRETURN
dc.subjectRETURNS
dc.subjectRISK AVERSE BORROWERS
dc.subjectRISK AVERSION
dc.subjectRISK MANAGEMENT
dc.subjectRISK TOLERANCE
dc.subjectRURAL FINANCE
dc.subjectSALE
dc.subjectSAVERS
dc.subjectSAVING INCENTIVES
dc.subjectSEEDS
dc.subjectSMALLHOLDER
dc.subjectSMALLHOLDER FARMERS
dc.subjectSOCIOECONOMIC STATUS
dc.subjectSOURCE OF INCOME
dc.subjectSOURCES OF INCOME
dc.subjectSOWING
dc.subjectSTANDARD DEBT CONTRACT
dc.subjectTAKE-UP RATE
dc.subjectTAKE-UP RATES
dc.subjectTAX CODE
dc.subjectTECHNICAL ASSISTANCE
dc.subjectTRADITIONAL SEEDS
dc.subjectVALUABLE
dc.subjectVALUATION
dc.subjectVILLAGES
dc.subjectWAGES
dc.subjectWATER SOURCE
dc.subjectWEALTH EFFECTS
dc.subjectYIELDS
dc.subjectMicrodata Set
dc.titleInsurance, Credit, and Technology Adoption : Field Experimental Evidence from Malawien
dspace.entity.typePublication
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2007/12/8828562/insurance-credit-technology-adoption-field-experimental-evidence-malawi
okr.globalpracticeSocial, Urban, Rural and Resilience
okr.globalpracticeAgriculture
okr.globalpracticeFinance and Markets
okr.guid853091468056364744
okr.identifier.doi10.1596/1813-9450-4425
okr.identifier.externaldocumentum000158349_20071204094532
okr.identifier.internaldocumentum8828562
okr.identifier.reportWPS4425
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2007/12/04/000158349_20071204094532/Rendered/PDF/wps4425.pdfen
okr.region.administrativeAfrica
okr.region.countryMalawi
okr.relation.associateddatasethttp://microdata.worldbank.org/index.php/catalog/1541
okr.relation.associatedurlhttps://openknowledge.worldbank.org/handle/10986/5782
okr.topicUrban Development::Hazard Risk Management
okr.topicFinance and Financial Sector Development::Access to Finance
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicCrops and Crop Management Systems
okr.topicAgriculture
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isAuthorOfPublication460a3e9c-f7d0-5335-977a-578f6fc8ebe3
relation.isAuthorOfPublication.latestForDiscovery460a3e9c-f7d0-5335-977a-578f6fc8ebe3
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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