Social Networks, Financial Literacy and Index Insurance
The authors present a randomized field experiment measuring the direct impact and social network spillovers of providing financial literacy and discount vouchers on farmers decision to purchase index-based drought insurance. To examine this, the a...
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| Format: | Journal Article |
| Language: | English en_US |
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World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2013/01/24299756/social-networks-financial-literacy-index-insurance http://hdl.handle.net/10986/21814 |
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okr-10986-218142021-04-23T14:04:04Z Social Networks, Financial Literacy and Index Insurance Gine, Xavier Karlan, Dean Ngatia, Muthoni ADMINISTRATIVE SUPPORT ADVERSE SELECTION AGRICULTURAL ACTIVITIES AGRICULTURAL FINANCE ATTRITION BEST PRACTICES BUYERS CASH TRANSFERS COFFEE COFFEE FARMERS COFFEE GROWING COFFEE TREES DEVELOPMENT ECONOMICS DROUGHT EXTERNALITIES FARM FARM SIZE FARMER FARMERS FINANCIAL EDUCATION FINANCIAL LITERACY FINANCIAL LITERACY MATERIALS FINANCIAL MATERIALS FINANCIAL SECTOR FINANCIAL SUPPORT HOUSEHOLD HEAD HOUSEHOLD SIZE INCOME INSURANCE INSURANCE COMPANIES INSURANCE MARKETS IRRIGATION MORAL HAZARD MUTUAL INSURANCE POOR POOR HOUSEHOLDS PROBABILITY PUBLIC ECONOMICS RESEARCH ASSISTANCE RETIREMENT RETIREMENT PLAN RISK MANAGEMENT RURAL RURAL HOUSEHOLDS TRANSACTION TRANSACTION COSTS VALUABLE The authors present a randomized field experiment measuring the direct impact and social network spillovers of providing financial literacy and discount vouchers on farmers decision to purchase index-based drought insurance. To examine this, the authors form clusters by grouping together geographically proximate households. Clusters were then randomly assigned to receive either a high or low intensity of each of the following treatments: financial literacy materials and discount vouchers off the price of insurance. The authors find social network spillovers to the provision of financial literacy materials but no spillovers to the provision of discount vouchers on farmers decision to purchase insurance. Specifically, receiving financial literacy materials when 60% or more of their neighbors also receive financial literacy materials, increases the likelihood that a farmer will purchase insurance by 4.3 percent (s.e. 2.5 percent) while receiving a financial literacy materials when 40 percent or fewer of their neighbors also receive financial literacy materials, decreases the likelihood that a farmer will purchase insurance by 2.6 percent (s.e. 2.5 percent). Looking at the discount vouchers, we find significant own effects of receiving discounts off the price of insurance on farmers take-up decision but negligible social network effects. Our results provide suggestive evidence that financial literacy materials are efficacious in encouraging take-up when farmers social contacts are similarly receive access to financial literacy materials. 2015-04-28T18:55:07Z 2015-04-28T18:55:07Z 2013-01-25 Journal Article http://documents.worldbank.org/curated/en/2013/01/24299756/social-networks-financial-literacy-index-insurance http://hdl.handle.net/10986/21814 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Journal Article |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ADMINISTRATIVE SUPPORT ADVERSE SELECTION AGRICULTURAL ACTIVITIES AGRICULTURAL FINANCE ATTRITION BEST PRACTICES BUYERS CASH TRANSFERS COFFEE COFFEE FARMERS COFFEE GROWING COFFEE TREES DEVELOPMENT ECONOMICS DROUGHT EXTERNALITIES FARM FARM SIZE FARMER FARMERS FINANCIAL EDUCATION FINANCIAL LITERACY FINANCIAL LITERACY MATERIALS FINANCIAL MATERIALS FINANCIAL SECTOR FINANCIAL SUPPORT HOUSEHOLD HEAD HOUSEHOLD SIZE INCOME INSURANCE INSURANCE COMPANIES INSURANCE MARKETS IRRIGATION MORAL HAZARD MUTUAL INSURANCE POOR POOR HOUSEHOLDS PROBABILITY PUBLIC ECONOMICS RESEARCH ASSISTANCE RETIREMENT RETIREMENT PLAN RISK MANAGEMENT RURAL RURAL HOUSEHOLDS TRANSACTION TRANSACTION COSTS VALUABLE |
| spellingShingle |
ADMINISTRATIVE SUPPORT ADVERSE SELECTION AGRICULTURAL ACTIVITIES AGRICULTURAL FINANCE ATTRITION BEST PRACTICES BUYERS CASH TRANSFERS COFFEE COFFEE FARMERS COFFEE GROWING COFFEE TREES DEVELOPMENT ECONOMICS DROUGHT EXTERNALITIES FARM FARM SIZE FARMER FARMERS FINANCIAL EDUCATION FINANCIAL LITERACY FINANCIAL LITERACY MATERIALS FINANCIAL MATERIALS FINANCIAL SECTOR FINANCIAL SUPPORT HOUSEHOLD HEAD HOUSEHOLD SIZE INCOME INSURANCE INSURANCE COMPANIES INSURANCE MARKETS IRRIGATION MORAL HAZARD MUTUAL INSURANCE POOR POOR HOUSEHOLDS PROBABILITY PUBLIC ECONOMICS RESEARCH ASSISTANCE RETIREMENT RETIREMENT PLAN RISK MANAGEMENT RURAL RURAL HOUSEHOLDS TRANSACTION TRANSACTION COSTS VALUABLE Gine, Xavier Karlan, Dean Ngatia, Muthoni Social Networks, Financial Literacy and Index Insurance |
| description |
The authors present a randomized field
experiment measuring the direct impact and social network
spillovers of providing financial literacy and discount
vouchers on farmers decision to purchase index-based
drought insurance. To examine this, the authors form
clusters by grouping together geographically proximate
households. Clusters were then randomly assigned to receive
either a high or low intensity of each of the following
treatments: financial literacy materials and discount
vouchers off the price of insurance. The authors find social
network spillovers to the provision of financial literacy
materials but no spillovers to the provision of discount
vouchers on farmers decision to purchase insurance.
Specifically, receiving financial literacy materials when
60% or more of their neighbors also receive financial
literacy materials, increases the likelihood that a farmer
will purchase insurance by 4.3 percent (s.e. 2.5 percent)
while receiving a financial literacy materials when 40
percent or fewer of their neighbors also receive financial
literacy materials, decreases the likelihood that a farmer
will purchase insurance by 2.6 percent (s.e. 2.5 percent).
Looking at the discount vouchers, we find significant own
effects of receiving discounts off the price of insurance on
farmers take-up decision but negligible social network
effects. Our results provide suggestive evidence that
financial literacy materials are efficacious in encouraging
take-up when farmers social contacts are similarly receive
access to financial literacy materials. |
| format |
Journal Article |
| author |
Gine, Xavier Karlan, Dean Ngatia, Muthoni |
| author_facet |
Gine, Xavier Karlan, Dean Ngatia, Muthoni |
| author_sort |
Gine, Xavier |
| title |
Social Networks, Financial Literacy and Index Insurance |
| title_short |
Social Networks, Financial Literacy and Index Insurance |
| title_full |
Social Networks, Financial Literacy and Index Insurance |
| title_fullStr |
Social Networks, Financial Literacy and Index Insurance |
| title_full_unstemmed |
Social Networks, Financial Literacy and Index Insurance |
| title_sort |
social networks, financial literacy and index insurance |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2013/01/24299756/social-networks-financial-literacy-index-insurance http://hdl.handle.net/10986/21814 |
| _version_ |
1764449278051221504 |