NBER

Wouter Gelade

Union Nationale des Mutualités Libres
Brussels

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Institutional Affiliation: Union Nationale des Mutualités Libres

NBER Working Papers and Publications

July 2020The Spillover Impact of Index Insurance on Agricultural Investment by Cotton Farmers in Burkina Faso
with Quentin Stoeffler, Michael Carter, Catherine Guirkinger: w27564
This paper examines whether agricultural insurance can boost investment by small scale farmers in West Africa. We conduct a randomized evaluation to analyze the impacts of index insurance for cotton farmers in Burkina Faso. We find no impact of insurance on cotton, but, consistent with microeconomic theory, we find significant spillover impacts on investment in other agricultural activities. Furthermore, the effects of insurance payouts on farmers hit by a shock confirm the potential of index insurance as a risk-management tool. However, we uncover important flaws in the implementation of the project that limited its impacts. Overall, this study suggests a promising role of index insurance for stimulating investment, but also draws attention to key challenges for an efficient delivery of i...

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