Publication Type
Journal Article
Version
publishedVersion
Publication Date
1-2017
Abstract
This study examines the effect of experience and knowledge on weather insurance adoption. First, we conduct insurance games with farmers, and find that the treatment improves real insurance take-up by 46%. The effect is not driven by changes in risk attitudes and perceived probability of disasters, or by learning of insurance benefits, but is driven by the experience acquired in the game. Second, we find that providing information about the payout probability has a strong positive effect on insurance take-up. Finally, when subjects receive both treatments, the probability information has a greater impact on take-up than does the disaster experience.
Keywords
Insurance, Take-up, Game, Experience, Knowledge
Discipline
Finance | Finance and Financial Management
Research Areas
Finance
Publication
Journal of Development Economics
Volume
124
First Page
83
Last Page
94
ISSN
0304-3878
Identifier
10.1016/j.jdeveco.2016.08.007
Publisher
Elsevier
Citation
CAI, Jing and SONG, Changcheng.
Do disaster experience and knowledge affect insurance take-up decisions?”. (2017). Journal of Development Economics. 124, 83-94.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6506
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.jdeveco.2016.08.007