Barriers to Household Risk Management : Evidence from India

Cole, Shawn; Giné, Xavier; Tobacman, Jeremy; Topalova, Petia; Townsend, Robert; Vickery, James

dc.creator	Cole, Shawn
dc.creator	Giné, Xavier
dc.creator	Tobacman, Jeremy
dc.creator	Topalova, Petia
dc.creator	Townsend, Robert
dc.creator	Vickery, James
dc.date	2012-03-19T18:43:23Z
dc.date	2012-03-19T18:43:23Z
dc.date	2010-12-01
dc.date.accessioned	2023-02-17T21:07:09Z
dc.date.available	2023-02-17T21:07:09Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101213144507
dc.identifier	http://hdl.handle.net/10986/3987
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244957
dc.description	Why do many households remain exposed to large exogenous sources of non-systematic income risk? This paper uses a series of randomized field experiments in rural India to test the importance of price and non-price factors in the adoption of an innovative rainfall insurance product. The analysis finds that demand is significantly price-elastic, but that even if insurance were offered with payout ratios similar to US, widespread coverage would not be achieved. The paper identifies key non-price frictions that limit demand: liquidity constraints, particularly among poor households, lack of trust, and limited salience. The authors suggest potential improvements in contract design to mitigate these frictions.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5504
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCESS TO FINANCE
dc.subject	ACCESS TO FINANCIAL SERVICES
dc.subject	ADMINISTRATIVE DATA
dc.subject	ADMINISTRATIVE RECORDS
dc.subject	ADVERSE SELECTION
dc.subject	AGRICULTURAL ECONOMICS
dc.subject	ASSET HOLDINGS
dc.subject	ASSET MARKETS
dc.subject	ASSET SALES
dc.subject	ASYMMETRIC INFORMATION
dc.subject	BEHAVIORAL ECONOMICS
dc.subject	BIASES
dc.subject	BORROWING
dc.subject	BUSINESS SCHOOL
dc.subject	CASH ON HAND
dc.subject	COLLATERAL
dc.subject	COMMODITY
dc.subject	COMMODITY PRICE
dc.subject	COMMODITY RISK MANAGEMENT
dc.subject	COMMUNITY GROUPS
dc.subject	CONSUMER
dc.subject	CONSUMER CREDIT
dc.subject	CONSUMER DURABLES
dc.subject	CONSUMER FINANCE
dc.subject	CONSUMERS
dc.subject	CONSUMPTION EXPENDITURES
dc.subject	CONSUMPTION SMOOTHING
dc.subject	CONTRACT DESIGN
dc.subject	CONTRIBUTION
dc.subject	CONTRIBUTIONS
dc.subject	COUPON
dc.subject	COUPONS
dc.subject	CREDIT CONSTRAINTS
dc.subject	CREDIT EXPANSION
dc.subject	CREDIT REGISTRIES
dc.subject	CROP FAILURE
dc.subject	DAILY WAGE
dc.subject	DEBT
dc.subject	DEBT CAPACITY
dc.subject	DEMOGRAPHIC
dc.subject	DEMOGRAPHIC CHARACTERISTICS
dc.subject	DEPOSITS
dc.subject	DERIVATIVES
dc.subject	DERIVATIVES MARKETS
dc.subject	DEVELOPING COUNTRIES
dc.subject	DEVELOPMENT ECONOMICS
dc.subject	DISABILITY
dc.subject	DISBURSEMENT
dc.subject	DISCOUNT RATE
dc.subject	DISCOUNT RATES
dc.subject	DIVERSIFICATION
dc.subject	DROUGHT
dc.subject	DROUGHTS
dc.subject	DUMMY VARIABLE
dc.subject	DUMMY VARIABLES
dc.subject	DURABLE
dc.subject	DURABLE GOODS
dc.subject	ECONOMIC DEVELOPMENT
dc.subject	ECONOMIC RISKS
dc.subject	EDUCATION LEVEL
dc.subject	EDUCATION LEVELS
dc.subject	EMERGING MARKET
dc.subject	EMERGING MARKET ECONOMIES
dc.subject	EMERGING MARKETS
dc.subject	EMPLOYEE
dc.subject	EXCHANGE RATE
dc.subject	EXOGENOUS INCOME
dc.subject	EXPENDITURE
dc.subject	EXPOSURE TO RISK
dc.subject	FARMER
dc.subject	FARMERS
dc.subject	FEDERAL RESERVE
dc.subject	FEDERAL RESERVE BANK
dc.subject	FEDERAL RESERVE SYSTEM
dc.subject	FINANCIAL CONSTRAINTS
dc.subject	FINANCIAL CONTRACT
dc.subject	FINANCIAL DECISION
dc.subject	FINANCIAL EDUCATION
dc.subject	FINANCIAL EDUCATION PROGRAM
dc.subject	FINANCIAL INNOVATION
dc.subject	FINANCIAL INNOVATIONS
dc.subject	FINANCIAL LITERACY
dc.subject	FINANCIAL MARKET
dc.subject	FINANCIAL MARKETS
dc.subject	FINANCIAL PRODUCTS
dc.subject	FINANCIAL QUESTIONS
dc.subject	FINANCIAL SERVICES
dc.subject	FINANCIAL STUDIES
dc.subject	FINANCIAL SUPPORT
dc.subject	FINANCIAL SYSTEM
dc.subject	FINANCIAL SYSTEMS
dc.subject	FUTURES
dc.subject	GENDER
dc.subject	GENERAL POPULATION
dc.subject	GOVERNMENT SUBSIDIES
dc.subject	HOMEOWNER
dc.subject	HOMEOWNERS
dc.subject	HOMEOWNERS INSURANCE
dc.subject	HOUSEHOLD FINANCE
dc.subject	HOUSEHOLD INCOME
dc.subject	HOUSEHOLD WEALTH
dc.subject	HOUSEHOLDS
dc.subject	IMPERFECT INFORMATION
dc.subject	INCOME
dc.subject	INCOME SMOOTHING
dc.subject	INCOME VARIABILITY
dc.subject	INCOMES
dc.subject	INSURANCE
dc.subject	INSURANCE COMPANIES
dc.subject	INSURANCE COMPANY
dc.subject	INSURANCE INDUSTRY
dc.subject	INSURANCE MARKET
dc.subject	INSURANCE MARKETS
dc.subject	INSURANCE POLICIES
dc.subject	INSURANCE POLICY
dc.subject	INSURANCE PREMIUMS
dc.subject	INSURANCE PRODUCT
dc.subject	INSURANCE PRODUCTS
dc.subject	INSURER
dc.subject	INTEREST RATE
dc.subject	INTEREST RATES
dc.subject	INTERNATIONAL BANK
dc.subject	INVENTORY
dc.subject	LABORERS
dc.subject	LAND HOLDINGS
dc.subject	LANDOWNER
dc.subject	LEGAL PROTECTIONS
dc.subject	LENDER
dc.subject	LEVEL OF EDUCATION
dc.subject	LEVELS OF RISK
dc.subject	LIABILITY
dc.subject	LIFE INSURANCE
dc.subject	LIMITED ACCESS
dc.subject	LIMITED FINANCIAL LITERACY
dc.subject	LIMITED LIABILITY
dc.subject	LIQUID ASSETS
dc.subject	LIQUIDITY
dc.subject	LIQUIDITY CONSTRAINTS
dc.subject	LOAN
dc.subject	LOANS FOR FARMERS
dc.subject	LONG-TERM CARE
dc.subject	LONG-TERM CARE INSURANCE
dc.subject	LOW INCOME
dc.subject	LOWER INCOME
dc.subject	MARGINAL UTILITY OF CONSUMPTION
dc.subject	MARKET COMPETITION
dc.subject	MARKET ECONOMIES
dc.subject	MARKET FAILURE
dc.subject	MARKET PORTFOLIO
dc.subject	MARKETING
dc.subject	MARKETING EFFORT
dc.subject	MATH
dc.subject	MATHEMATICS
dc.subject	MICRO-INSURANCE
dc.subject	MICROFINANCE
dc.subject	MICROFINANCE INSTITUTION
dc.subject	MICROFINANCE INSTITUTIONS
dc.subject	MICROFINANCE LOANS
dc.subject	MICROINSURANCE
dc.subject	MONETARY FUND
dc.subject	MORAL HAZARD
dc.subject	MORTGAGE
dc.subject	MORTGAGE CHOICE
dc.subject	OPERATING COSTS
dc.subject	PAYOUT RATIO
dc.subject	PAYOUT RATIOS
dc.subject	PENETRATION RATE
dc.subject	PENSION
dc.subject	POLITICAL ECONOMY
dc.subject	PORTFOLIO
dc.subject	PRICE INDICES
dc.subject	PRICE INSURANCE
dc.subject	PRICE SENSITIVITY
dc.subject	PRIVATE SECTOR DEVELOPMENT
dc.subject	PROBABILITIES
dc.subject	PROBABILITY
dc.subject	PROFITABILITY
dc.subject	PROSPERITY
dc.subject	PURCHASES
dc.subject	RATE OF RETURN
dc.subject	REMITTANCES
dc.subject	REPAYMENT
dc.subject	REPAYMENTS
dc.subject	REPUTATION
dc.subject	RESEARCH ASSISTANCE
dc.subject	RESERVE BANK
dc.subject	RESOURCE ALLOCATION
dc.subject	RETIREMENT
dc.subject	RETIREMENT SECURITY
dc.subject	RETURNS
dc.subject	RISK AVERSION
dc.subject	RISK DIVERSIFICATION
dc.subject	RISK EXPOSURE
dc.subject	RISK MANAGEMENT
dc.subject	RISK POOLING
dc.subject	RISK SHARING
dc.subject	RURAL FINANCE
dc.subject	SAFETY
dc.subject	SALES
dc.subject	SAVINGS
dc.subject	SAVINGS ACCOUNT
dc.subject	SAVINGS DEPOSITS
dc.subject	SECONDARY SCHOOL
dc.subject	SERIAL NUMBER
dc.subject	SKILLED WORKERS
dc.subject	SMART MONEY
dc.subject	SOCIAL COLLATERAL
dc.subject	SOURCES OF INCOME
dc.subject	STOCK MARKET
dc.subject	SUPPLIERS
dc.subject	TAKE-UP RATE
dc.subject	TAKE-UP RATES
dc.subject	TECHNICAL SUPPORT
dc.subject	TECHNOLOGICAL ADVANCES
dc.subject	TRACK RECORD
dc.subject	TRANSACTIONS COSTS
dc.subject	TRANSITORY INCOME
dc.subject	VALUABLE
dc.subject	VALUE OF SAVINGS
dc.subject	VILLAGE
dc.subject	VILLAGES
dc.subject	VOLATILITY
dc.subject	WELFARE BENEFITS
dc.subject	WORTH
dc.title	Barriers to Household Risk Management : Evidence from India
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	South Asia
dc.coverage	South Asia
dc.coverage	South Asia
dc.coverage	Asia
dc.coverage	India