Enhancing adaptive capacity through climate-smart insurance: Theory and evidence from India

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dc.creatorKramer, Berber
dc.creatorCeballos, Francisco
dc.date2018-12-12
dc.date2024-06-21T09:09:14Z
dc.date2024-06-21T09:09:14Z
dc.date.accessioned2026-06-27T15:41:21Z
dc.descriptionBundling agricultural insurance with climate-smart technologies and practices (CSA) can help improve risk management for smallholder farmers. This paper analyzes how bundling affects demand for insurance and CSA. Calibrating index insurance parameters to CSA payoff profiles increases the demand for insurance, but only when basis risk is low, and these effects of reducing basis risk itself. This raises the question how to bundle insurance products that leverage new technologies to provide indemnity insurance coverage with minimal basis risk. We therefore study the effect of bundling indemnity insurance with CSA technologies. Specifically, in a field experiment in India, we test whether conditioning insurance payouts on not burning residues improves residue management as a CSA technology. We find that this is the case, suggesting that indemnity insurance can help promote CSA technology adoption, but we also discuss shortcomings of this bundling approach, and identify potential alternatives to combine indemnity insurance and CSA technologies into a complementary risk management bundle.
dc.identifierhttps://hdl.handle.net/10568/146877
dc.identifier.urihttp://hdl.handle.net/123456789/111783
dc.languageen
dc.publisherInternational Association of Agricultural Economists
dc.rightsOpen Access
dc.sourceKramer, Berber; and Ceballos, Francisco. 2018. Enhancing adaptive capacity through climate-smart insurance: Theory and evidence from India. Presented at the 2018 International Conference of Agricultural Economists, Vancouver, British Columbia, July 28-August 2, 2018. https://purl.umn.edu/275926
dc.subjectinsurance
dc.subjectrisk management
dc.subjecttechnology
dc.subjectcrop insurance
dc.subjectinnovation adoption
dc.subjectclimate-smart agriculture
dc.subjectphotography
dc.subjectclimate change
dc.titleEnhancing adaptive capacity through climate-smart insurance: Theory and evidence from India
dc.typeConference Paper

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Instituto Internacional de Investigación sobre Políticas Alimentarias (IFPRI)