The impact of weather insurance on consumption, investment, and welfare

• 成果类型: Article
• 署名作者: de Nicola, Francesca
• 署名单位: The World Bank
• 刊物名称: QUANTITATIVE ECONOMICS
• ISSN/ISSBN: 1759-7323
• DOI: 10.3982/QE300
• 发表日期: 2015
• 页码: 637-661
• 关键词: Weather insurance; welfare; technology adoption

摘要

I develop and estimate a dynamic stochastic optimization model to assess the impact of weather insurance on the consumption, investment, and welfare of farmers in developing countries. Weather insurance has the potential to provide large welfare gains, equivalent to a permanent increase in consumption of almost 17%. Moreover, it can allow for the adoption of riskier but more productive seeds, further enhancing welfare. The interplay with other uninsured risks, the presence of liquidity constraints, basis risk, and loading factor on the insurance premium may account for the low take-up that is often empirically observed.