Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

COSSA makes 10 suggestions to next Administration for supporting and using social science research

Thompson says US prison population is 'staggeringly high' at about 1.5 million, despite 2% drop for 2015

Levy et al. find Michigan's Medicaid expansion boosted state's economy while increasing number of insured

More News

Highlights

2017 PAA Annual Meeting, April 27-29, Chicago

NIH funding opportunity: Etiology of Health Disparities and Health Advantages among Immigrant Populations (R01 and R21), open Jan 2017

Russell Sage 2017 Summer Institute in Computational Social Science, June 18-July 1. Application deadline Feb 17.

Russell Sage 2-week workshop on social science genomics, June 11-23, 2017, Santa Barbara

More Highlights

Next Brown Bag

Mon, Jan 23, 2017 at noon:
Decline of cash assistance and child well-being, Luke Shaefer

Insurance, credit, and technology adoption: Field experimental evidence from Malawi

Publication Abstract

Gine, Xavier, and Dean Yang. 2009. "Insurance, credit, and technology adoption: Field experimental evidence from Malawi." Journal of Development Economics, 89(1): 1-11.

Does production risk suppress the demand for credit? We implemented a randomized field experiment to ask whether provision of insurance against a major source of production risk induces farmers to take out loans to adopt a new crop technology. 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 groundnut seeds for planting in the November 2006 crop season. The other half of 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% for farmers who were offered the uninsured loan. There is Suggestive evidence that reduced take-up of the insured loan was due to farmers already having implicit insurance from the limited liability clause in the loan contract: insured loan take-up was positively correlated with farmer education, income, and wealth, which may proxy for the individual's default costs. By contrast, take-up of the uninsured loan Was uncorrelated with these farmer characteristics.

DOI:10.1016/j.jdeveco.2008.09.007 (Full Text)

Country of focus: Malawi.

Browse | Search : All Pubs | Next