Delayed Premium Payment, Insurance Adoption, and Household Investment in Rural China
69 Pages Posted: 3 Mar 2014 Last revised: 12 Nov 2019
Date Written: February 1, 2017
We conduct a randomized controlled trial to examine the impacts of delayed premium payment on insurance uptake and the subsequent investment decisions among small-holder farmers in rural China. Our results show uptake among those with the delayed payment option is three times as high as among those without the option. Using the random variation in uptake thus induced, we find a positive impact of insurance adoption on household investment in production, especially higher-risk activities.
Keywords: China, East Asia, Asia, agricultural insurance, liquidity, microinsurance, delayed premium payment, liquidity constraint
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