京都大学 大学院経済学研究科・経済学部

Title: "What explains low demand on weather index insurance? Theoretical and empirical evidence from Zambia"

Abstract: A series of empirical studies report very low demand on weather index insurance. Although the basic risk is attributed to such low demand, no empirical study explicitly confirmed its presence. Using the insurance sales experiment data from Zambia, we exploit a plot-level rainfall data to fill this gap. We first developed a simple model of insurance demand to test model predictions. Our empirical results well supported the predictions and found a presence of basis risk. Moreover, taking advantage of the change in insurance design within the experiment period, our DID analysis suggests the basis risk significantly reduces an insurance demand.

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