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dc.contributorBarrett, Christopheren_US
dc.contributorMude, Andrewen_US
dc.creatorJensen, Nathanielen_US
dc.identifier.citationNathaniel Jensen, Christopher Barrett, Andrew Mude. (1/7/2015). Index-based insurance: Lottery ticket or insurance.en_US
dc.description.abstractEnvironmental shocks are drivers of poverty as well as a fact of life in many rural areas of the developing world. In the developed world, agricultural insurance provides some protection from such calamities. But conventional insurance products have not reached many rural households in developing countries due to the high costs of gathering information relative to the size of policies demanded and well-known moral hazard, and adverse selection issues that complicate product design and pricing. Recently, there has been much excitement around the use of index-based insurance, as an alternative to conventional insurance products, to extend the rural poor’s access to formal insurance coverage in developing countries (Alderman & Haque 2007; Barnett, Barrett & Skees 2008; Mahul & Stutley 2010). Index insurance provides indemnity payments based on a signal that 2 ILRI Research Brief—July 2015 is related to covariate losses rather than actual and observed individual losses. When signals are chosen properly—those that are easy to observe in near-realtime, exogenous to the behaviours and characteristics of both the insurer and insurees, and highly correlated with the insured risk—suppliers of index insurance face much lower costs associated with adverse section, moral hazard monitoring, and validation of claims than they would if they were offering conventional policies.en_US
dc.titleIndex-based insurance: Lottery ticket or insurance?en_US
cg.creator.idJensen, Nathaniel: 0000-0002-2946-5771en_US
cg.creator.idMude, Andrew: 0000-0003-4903-6613en_US
cg.contributor.centerInternational Livestock Research Institute - ILRIen_US
cg.contributor.centerCornell University - CORNELLen_US
cg.contributor.crpCRP on Dryland Systems - DSen_US
cg.contributor.funderUnited States Agency for International Development - USAIDen_US
cg.contributor.funderEuropean Union, European Commission - EU-ECen_US
cg.contributor.funderAustralian Department of Foreign Affairs and Trade - DFAT(AusAID, ADRAS)en_US
cg.contributor.funderDepartment for International Development United Kingdom - DFIDen_US
cg.contributor.projectIndex-Based Livestock Insuranceen_US
cg.contributor.project-lead-instituteInternational Livestock Research Institute - ILRIen_US
cg.coverage.regionEastern Africaen_US
dc.identifier.statusOpen accessen_US

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