Demand and impact of crop microinsurance in India

Ramasubramanian, Janani Akhilandeswari (2015) Demand and impact of crop microinsurance in India. Doctoral thesis (PhD), University of Sussex.

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Abstract

This thesis presents an analysis of the demand and impact of crop microinsurance in
India. The study is based on extensive fieldwork and primary data collection from two
field sites in India.

The first empirical chapter examines the impact of crop microinsurance on output.
Accounting for the endogeneity of insurance investment, this chapter uses a two-step
instrumental variables approach to assess the impact of insurance on yield for two
varieties of paddy. The assessment is based on secondary district level data and primary
household survey data. The findings indicate that impact of insurance on yield is not
homogeneous across crops. It is based on the flexibility of the crop’s input requirement
structure.

The second chapter explores the impact of crop insurance on the use of inputs such as
seeds, fertilizers, pesticides, irrigation and labour for paddy varieties. This chapter is a
significant addition to the existing small pool of literature on the impacts of crop
insurance on a range of inputs. Since both insurance and input decisions are ex-ante, a
simultaneous equations model is employed to assess impacts. Results show that the
impact of crop microinsurance varies based on the type of input, crop under
consideration and its significance in the income portfolio of a farmer.

The final chapter assesses the demand for crop microinsurance using a contingent
valuation experiment on turmeric farmers. This is a first of its kind attempt to delineate
the willingness to join (WTJ) from the amount of willingness to pay (WTP) for crop
insurance policies. Results based on a Heckman selection model, indicate that while the
WTJ is influenced by risk attitudes and product literacy, the amount of WTP is driven
by a careful assessment of the other risk coping avenues available to a household. Only
the ‘residual’ risk is passed on to insurance.

Item Type: Thesis (Doctoral)
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: D History General and Old World > DS History of Asia > DS401 India (Bharat)
H Social Sciences > HD Industries. Land use. Labour > HD0101 Land use
H Social Sciences > HD Industries. Land use. Labour > HD1401 Agriculture
Depositing User: Library Cataloguing
Date Deposited: 21 May 2015 16:02
Last Modified: 28 Sep 2015 14:18
URI: http://sro.sussex.ac.uk/id/eprint/53932

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