Managing Risk with Insurance and Savings : Experimental Evidence for Male and Female Farm Managers in the Sahel
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...
| Main Authors: | , , , |
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| Format: | Publications & Research |
| Language: | English en_US |
| Published: |
World Bank Group, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/01/23856332/managing-risk-insurance-savings-experimental-evidence-male-female-farm-managers-sahel http://hdl.handle.net/10986/21393 |
| Summary: | 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. |
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