Delayed Premium Payment, Insurance Adoption, and Household Investment in Rural China

69 Pages Posted: 3 Mar 2014 Last revised: 12 Nov 2019

See all articles by Yanyan Liu

Yanyan Liu

International Food Policy Research Institute (IFPRI)

Kevin Chen

International Food Policy Research Institute (IFPRI)

Ruth Vargas Hill

World Bank

Date Written: February 1, 2017

Abstract

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

Suggested Citation

Liu, Yanyan and Chen, Kevin and Hill, Ruth Vargas, Delayed Premium Payment, Insurance Adoption, and Household Investment in Rural China (February 1, 2017). IFPRI Discussion Paper 01306. Available at SSRN: https://ssrn.com/abstract=2373239 or http://dx.doi.org/10.2139/ssrn.2373239

Yanyan Liu (Contact Author)

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Kevin Chen

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Ruth Vargas Hill

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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