Index insurance and risk management

The economic potential for area-yield crop insurance: An application to maize in Ghana

Shifting from an exogenous weather-based to an endogenous yield-based index introduces concerns of asymmetric information, which can lead to market failures that constrain supply from providers. Larger insurance zones inhibit index manipulation, but average yield is less informative about any individual plot. We quantify this tradeoff for maize in Ghana using a spatial yield model calibrated to match observed production.
Ghana inequality game

Evidence Insight: Inequality Impacts Risk Sharing and Insurance Demand

Lab-in-the-field experiments in Ghana found that participants were less likely to share risk, and more likely to select insurance, when their wealth was unequal. The findings raise the prospect that addressing inequality could have spillover effects for poverty reduction and resilience.