Unpredictable rainfall is an important risk for agricultural activity, and farmers in developing countries often receive incomplete insurance from informal risk-sharing networks. This paper presents findings from a study that examines the demand for, and effects of, offering formal index-based rainfall insurance through a randomized experiment in an environment where the informal risk sharing network can be readily identified and richly characterized: sub-castes in rural India.
Selling Formal Insurance to the Informally Insured
A. Mushfiq Mobarak, Mark Rosenzweig
2012