Menand, LevGiné, XavierTownsend, RobertVickery, James2012-03-192012-03-192010-10-01https://hdl.handle.net/10986/4002Rainfall index insurance provides a payout based on measured local rainfall during key phases of the agricultural season, and in principle can help rural households diversify a key source of idiosyncratic risk. This paper describes basic features of rainfall insurance contracts offered in India since 2003, and documents stylized facts about market demand and the distribution of payouts. The authors summarize the results of previous research on this market, which provides evidence that price, liquidity constraints, and trust all present significant barriers to increased take-up. They also discuss potential future prospects for rainfall insurance and other index insurance products.CC BY 3.0 IGOACCESS TO INFORMATIONACCOUNTINGADMINISTRATIVE COSTSADMINISTRATIVE DATAAGRICULTURAL ECONOMICSAGRICULTURAL INSURANCEAGRICULTURAL INSURANCE SCHEMEALLOCATIONBANK ACCOUNTBANK POLICYBANKSBASIS RISKBEHAVIORAL ECONOMICSBONDSBORROWINGBROKERSBUSINESS SCHOOLCALCULATIONSCAPITAL MARKETCASH PAYMENTCLIMATECLIMATE CHANGECONSUMERCONSUMER CREDITCONSUMER LOANCONSUMER PROTECTIONCONSUMPTION PATTERNSCONSUMPTION SMOOTHINGCONTRACT DESIGNCONTRIBUTIONCOUPONSCREDIT CONSTRAINTSCREDIT PRODUCTSCROP INSURANCECROP INSURANCE SCHEMEDAMAGESDEBTDEBT CAPACITYDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSDISABILITYDISBURSEMENTSDIVERSIFICATIONDROUGHTDROUGHT INSURANCEDROUGHTSECONOMIC DEVELOPMENTEMERGING MARKETSEXPENDITUREEXTREME TAILEXTREME WEATHEREXTREME WEATHER EVENTSFAMILY MEMBERFAMILY MEMBERSFAMILY PLANNINGFEDERAL RESERVEFEDERAL RESERVE BANKFINANCIAL ASSISTANCEFINANCIAL CONSTRAINTSFINANCIAL INNOVATIONFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL LITERACYFINANCIAL MARKETFINANCIAL MARKETSFINANCIAL PRODUCTSFINANCIAL SERVICESFINANCIAL SYSTEMSFLOOD INSURANCEGENERAL INSURANCEGOVERNMENT ASSISTANCEGOVERNMENT CROP INSURANCEGOVERNMENT INSURANCEGOVERNMENT SUBSIDIESHOUSEHOLD CONSUMPTIONHOUSEHOLD INCOMEHOUSEHOLD INCOMESHURRICANESINCOMEINCOME SHOCKSINCOME SMOOTHINGINCOME VARIABILITYINDEMNITYINFORMAL INSURANCEINSURANCEINSURANCE AGENTSINSURANCE ARRANGEMENTSINSURANCE COMPANIESINSURANCE COMPANYINSURANCE CONTRACTINSURANCE CONTRACTSINSURANCE COVERAGEINSURANCE CULTUREINSURANCE MARKETINSURANCE MARKETSINSURANCE PAYOUTINSURANCE POLICIESINSURANCE POLICYINSURANCE PREMIUMSINSURANCE PRODUCTINSURANCE PRODUCTSINSURANCE REGULATIONSINSURANCE SCHEMEINSURANCE SCHEMESINSURANCE UNDERWRITERSINSURERSINTEREST RATEINTEREST RATESINTEREST WAIVERSINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTINTERNATIONAL MARKETSINVESTMENT CHOICELABOR MARKETSLABOR SUPPLYLANDOWNERSLIQUID ASSETSLIQUIDATIONLIQUIDITYLIQUIDITY CONSTRAINTSLIVESTOCK INSURANCELIVING STANDARDSLOANLOAN DEMANDLOCAL AREA BANKLOCAL FINANCIAL INSTITUTIONSLOST INCOMELOW-INCOMELOW-INCOME INDIVIDUALSLOWER PRICESMACROECONOMIC VOLATILITYMARGINAL UTILITYMARGINAL UTILITY OF CONSUMPTIONMARKET COMPETITIONMARKET DEMANDMARKET PENETRATIONMARKET SHAREMARKET SIZEMARKET STRUCTUREMARKETINGMATURE MARKETMICRO INSURANCEMICROCREDITMICROFINANCEMICROFINANCE INSTITUTIONMICROFINANCE INSTITUTIONSMICROINSURANCEMONEYLENDERSMORAL HAZARDNATIONAL INSURANCENATURAL DISASTERSOTHER ASSETSPOLICYHOLDERSPORTFOLIOPRICE OF COALPROBABILITYPRODUCTIVITYPROGRAMSPURCHASESRATE OF RETURNRATES OF RETURNREINSURANCEREMITTANCEREMITTANCESRESOURCE ALLOCATIONRETURNSRISK AVERSIONRISK INSURANCERISK MANAGEMENTRISK MITIGATIONRISK OF DEFAULTRISK REDUCTIONRISK SHARINGRISK TAKINGRISKS OF CLIMATE CHANGESALESALESSAVINGSSETTLEMENTSOCIOECONOMIC STATUSSTOCK MARKETSUSTAINABILITYTRANSACTIONTRANSACTION COSTSTRANSITORY INCOMEUNDERINSUREDUNDERWRITERSVALUABLEVALUATIONWEATHER INSURANCEWELFARE PROGRAMSWORST-CASEWORTHWorld Bank10.1596/1813-9450-5459