科技报告详细信息
How Does Risk Management Influence Production Decisions? Evidence from a Field Experiment
Cole, Shawn ; Giné ; , Xavier ; Vickery, James
World Bank, Washington, DC
关键词: ACCESS TO INSURANCE;    ACCOUNTING;    ADVERSE SELECTION;    ALLOCATION;    AMOUNT OF CREDIT;   
DOI  :  10.1596/1813-9450-6546
RP-ID  :  WPS6546
学科分类:社会科学、人文和艺术(综合)
来源: World Bank Open Knowledge Repository
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【 摘 要 】

Weather is a key source of income riskfor many firms and households, particularly in emergingmarket economies. This paper uses a randomized controlledtrial approach to study how an innovative risk managementinstrument for hedging rainfall risk affects productiondecisions among a sample of Indian agricultural firms. Theanalysis finds that the provision of insurance inducesfarmers to shift production toward higher-return buthigher-risk cash crops, particularly among more-educatedfarmers. The results support the view that financialinnovation may help mitigate the real effects of uninsuredproduction risk. In a second experiment, the study elicitswillingness to pay for insurance policies that differ intheir contract terms, using the Becker-DeGroot-Marshakmechanism. Willingness-to-pay is increasing in the actuarialvalue of the insurance, but substantially less thanone-for-one, suggesting that farmers' valuations areinconsistent with a fully rational benchmark.

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