Insurance and Rural Welfare
Tinbergen Institute Discussion Paper No. 07-011/2
26 Pages Posted: 2 Feb 2007
Date Written: January 2007
Abstract
Assessing the scope for insurance in rural communities usually requires a structural model of household behavior under risk. One of the few empirical applications of such models is the study by Rosenzweig and Wolpin (1993) who conclude that Indian farmers in the ICRISAT villages would not benefit from the introduction of formal weather insurance. In this paper we investigate how models such as theirs can be estimated from panel data on production and assets. We show that if assets can take only a limited number of values the coefficients of the model cannot be estimated with reasonable precision. We also show that this can affect the conclusion that insurance would not be welfare improving.
Keywords: Structural estimation, discrete choices, insurance
JEL Classification: C51, D91
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Growth and Risk: Methodology and Micro Evidence
By Chris Elbers, Jan Willem Gunning, ...
-
Helping South Asia Cope with Natural Disasters: The Role of Social Protection
-
Shocks, Coping, and Outcomes for Pakistan's Poor: Health Risks Predominate
By Rasmus Heltberg and Niels Lund
-
Growth Regressions and Economic Theory
By Chris Elbers and Jan Willem Gunning
-
Asset-Based Approaches to Poverty Reduction in a Globalized Context
-
Addressing Human Vulnerability to Climate Change: Toward a 'No Regrets' Approach
By Rasmus Heltberg, Steen Jorgensen, ...
-
International NGOs and Poverty Reduction Strategies: The Contribution of an Asset-Based Approach
By Pamela Sparr and Caroline Moser
-
Climate Change: Challenges for Social Protection in Africa
By Rasmus Heltberg, Steen Jorgensen, ...