Handling the Weather : Insurance, Savings, and Credit in West Africa

de Nicola, Francesca

World Bank Group, Washington, DC

关键词: ACCESS TO INSURANCE;    ADMINISTRATIVE COSTS;    ADVERSE SELECTION;    AGRICULTURAL ECONOMICS;    AGRICULTURAL INSURANCE;   

DOI  :  10.1596/1813-9450-7187
RP-ID  :  WPS7187

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Farmers in developing countries face awide array of risks. Yet they often lack formal financialinstruments to protect against risks. This paper examinesthe impact on consumption, investment, and welfare of theseparate provision of three financial products: weatherinsurance, savings, and credit. The paper develops a dynamicstochastic mode to capture the essential features of thelives of West African rural households. The model iscalibrated with data from farmers in Burkina Faso andSenegal, to assess quantitatively the effects of threepolicy interventions. For each intervention the analysisfirst considers a benchmark scenario that abstracts from theflaws that affect each instrument; later the assumptions arerelaxed. Weather insurance offers the largest welfare gainsat each level of wealth, although the gains aresignificantly reduced by introducing a multiple on theinsurance premium. Over time, however, savings can lead tosubstantial gains, higher than those achievable byunsubsidized weather insurance.