Weather Insurance Savings Accounts

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dc.creatorStein, Daniel
dc.creatorTobacman, Jeremy
dc.date2015-05-04T19:00:33Z
dc.date2015-05-04T19:00:33Z
dc.date2015-04
dc.date.accessioned2026-07-01T00:49:23Z
dc.descriptionBetter insurance against rainfall risk could improve the security of hundreds of millions of agricultural households around the world. However, customers have shown little demand for stand-alone insurance products. This paper theoretically and experimentally analyzes an innovative financial product called a Weather Insurance Savings Account (WISA), which combines savings and rainfall insurance. The paper uses a standard model of intertemporal insurance demand to study how customers demand for a WISA varies with the amount of insurance offered. A laboratory experiment is then used to elicit participants valuations of pure insurance, pure savings, and intermediate WISA types. Contrary to the standard model, within-subjects comparisons show that many participants prefer both pure insurance and pure savings to any interior mixture of the two, suggesting that market demand for a WISA is likely to be low. Additional experimental and observational evidence distinguishes between several alternative explanations. One possibility that survives the additional tests is diminishing sensitivity to losses, as in prospect theory.
dc.formatapplication/pdf
dc.identifierhttp://documents.worldbank.org/curated/en/2015/04/24324721/weather-insurance-savings-accounts
dc.identifierhttps://hdl.handle.net/10986/21849
dc.identifierhttps://doi.org/10.1596/1813-9450-7235
dc.identifier.urihttp://hdl.handle.net/123456789/411545
dc.languageEnglish
dc.languageen_US
dc.publisherWorld Bank, Washington, DC
dc.relationPolicy Research Working Paper;No. 7235
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo/
dc.rightsWorld Bank
dc.subjectCATASTROPHIC EVENTS
dc.subjectRISKS
dc.subjectFINANCIAL SERVICES
dc.subjectDEPOSIT
dc.subjectHOLDING
dc.subjectDURABLE GOODS
dc.subjectCUSTOMER
dc.subjectGOVERNMENT CROP INSURANCE
dc.subjectRISK REDUCTION
dc.subjectVALUATION
dc.subjectFARMER
dc.subjectINCOME
dc.subjectINTEREST
dc.subjectLIFE INSURANCE
dc.subjectGUARANTEES
dc.subjectSAVINGS INSTRUMENT
dc.subjectMARGINAL COST
dc.subjectSAVINGS ACCOUNTS
dc.subjectINTEREST RATE
dc.subjectOPTION
dc.subjectEXCHANGE
dc.subjectDISCOUNT RATE
dc.subjectINSURER
dc.subjectINFORMATION
dc.subjectDEVELOPING COUNTRIES
dc.subjectDEVELOPING ECONOMIES
dc.subjectINSURANCE POLICIES
dc.subjectLOAN
dc.subjectDISCOUNT
dc.subjectASYMMETRIC INFORMATION
dc.subjectDISASTER
dc.subjectPRIVATE INSURANCE
dc.subjectPRICE
dc.subjectSAVING
dc.subjectINTERNATIONAL BANK
dc.subjectINSURANCE MARKET
dc.subjectINSURANCE COMPANY
dc.subjectPOLICYHOLDERS
dc.subjectOFFER PRICE
dc.subjectCROP INSURANCE
dc.subjectPUBLIC POLICY
dc.subjectSAVINGS
dc.subjectFINANCIAL PRODUCT
dc.subjectCREDIT UNIONS
dc.subjectINSURANCE MARKETS
dc.subjectINSURANCE PRODUCT
dc.subjectLOW-INCOME COUNTRIES
dc.subjectNASCENT MARKET
dc.subjectINCOME SHOCK
dc.subjectNEW PRODUCT
dc.subjectDEPOSIT ACCOUNTS
dc.subjectMARKETS
dc.subjectRETURN
dc.subjectRATES
dc.subjectLOANS
dc.subjectFARMERS
dc.subjectCONSUMER DEMAND
dc.subjectINSURANCE COVERAGE
dc.subjectINSURANCE POLICY
dc.subjectNEGATIVE SHOCK
dc.subjectBANK POLICY
dc.subjectMARKET PRICE
dc.subjectSAVINGS ACCOUNT
dc.subjectBANKS
dc.subjectTECHNOLOGY
dc.subjectDROUGHTS
dc.subjectEMERGENCY
dc.subjectVALUATIONS
dc.subjectCREDIT CONSTRAINTS
dc.subjectGOOD
dc.subjectWAGES
dc.subjectAGRICULTURAL LOANS
dc.subjectGENERAL INSURANCE
dc.subjectDROUGHT
dc.subjectBARRIERS
dc.subjectCOUPONS
dc.subjectDERIVATIVE
dc.subjectINSURANCE PRODUCTS
dc.subjectANNUITIES
dc.subjectFUTURE
dc.subjectCROP INSURANCE SCHEME
dc.subjectLOSSES
dc.subjectBANK
dc.subjectRETURNS
dc.subjectCREDIT
dc.subjectMICROINSURANCE
dc.subjectCLAIMS
dc.subjectCOINSURANCE
dc.subjectRISK EXPOSURE
dc.subjectCONSUMERS
dc.subjectBIDS
dc.subjectPROPERTIES
dc.subjectSHARES
dc.subjectMICRO-INSURANCE
dc.subjectFACE VALUE
dc.subjectMARKET
dc.subjectFACTORS
dc.subjectECONOMICS
dc.subjectEXPOSURE
dc.subjectINSURANCE
dc.subjectMICROFINANCE
dc.subjectLOSS
dc.subjectAGENTS
dc.subjectRENTERS INSURANCE
dc.subjectGOODS
dc.subjectSECURITY
dc.subjectDURABLE
dc.subjectINVESTMENT
dc.subjectRISK
dc.subjectCOMMISSIONS
dc.subjectSHARE
dc.subjectVALUATION TECHNIQUES
dc.subjectPOVERTY
dc.subjectBANKING
dc.subjectMARKET DEMAND
dc.subjectBID
dc.subjectINVESTMENTS
dc.subjectRISK MANAGEMENT
dc.subjectLENDING
dc.subjectNOMINAL INTEREST RATE
dc.subjectINSURANCE COMPANIES
dc.subjectUNDERINSURED
dc.subjectEXCHANGE RATE
dc.subjectINSTRUMENT
dc.subjectCUSTOMERS
dc.subjectRISK AVERSION
dc.subjectCOVERAGE
dc.subjectPARTIAL RISK
dc.subjectGUARANTEE
dc.subjectPREMIUMS
dc.titleWeather Insurance Savings Accounts
dc.typeWorking Paper
dc.typeDocument de travail
dc.typeDocumento de trabajo

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