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

Additional URL

https://doi.org/10.1016/j.jdeveco.2016.08.007

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