Managing risk with insurance and savings: experimental evidence for male and female farm managers in the Sahel

Clara Delavallade, Felipe Dizon, Ruth Hill and Jean Paul Petraud

No 7176, Policy Research Working Paper Series from The World Bank

Abstract: Although there is fast-growing policy interest in offering financial products to help rural households manage risk, the literature is still scant as to which products are the most effective. This paper uses a randomized field experiment in Senegal and Burkina Faso to compare male and female farmers who are offered index-based agricultural insurance with those who are offered a variety of savings instruments. The paper finds that female farm managers were less likely to purchase agricultural insurance and more likely to invest in savings for emergencies, even controlling for access to informal insurance and differences in crop choice. It is hypothesized that this finding results from the fact that, although men and women are equally exposed to yield risk, women face additional sources of lifecycle risk -- particularly health risks associated with fertility and childcare -- that men do not. In essence, the basis risk associated with agricultural insurance products is higher for women. Purchasing insurance increased input spending and use more than savings. Those who purchased more insurance realized higher average yields and were better able to manage food insecurity and shocks. This finding suggests that gender differences in demand for financial products can have an impact on productivity, resilience, and welfare.

Keywords: Emerging Markets; Hazard Risk Management; Insurance&Risk Mitigation; Rural Poverty Reduction; Financial Intermediation (search for similar items in EconPapers)
Date: 2015-01-01
New Economics Papers: this item is included in nep-agr, nep-dev, nep-exp, nep-ias and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Working Paper: Managing Risk with Insurance and Savings: Experimental Evidence for Male and Female Farm Managers in the Sahel (2015)
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