Staff Publications

Staff Publications

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    'Staff publications' is the digital repository of Wageningen University & Research

    'Staff publications' contains references to publications authored by Wageningen University staff from 1976 onward.

    Publications authored by the staff of the Research Institutes are available from 1995 onwards.

    Full text documents are added when available. The database is updated daily and currently holds about 240,000 items, of which 72,000 in open access.

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Record number 552844
Title Does bundling crop insurance with certified seeds crowd-in investments? Experimental evidence from Kenya
Author(s) Bulte, E.; Cecchi, Francesco; Lensink, Robert; Marr, Ana; Asseldonk, Marcel van
Source Journal of Economic Behavior and Organization (2019). - ISSN 0167-2681
DOI https://doi.org/10.1016/j.jebo.2019.07.006
Department(s) WASS
Development Economics
Innovation- and Risk Management and Information Governance
Publication type Refereed Article in a scientific journal
Publication year 2019
Keyword(s) Farm management - Index and indemnity-based insurance - Input bundling - Subsidized input
Abstract

We use a randomised experiment in Kenya to analyse how smallholder farmers respond to receiving a free hybrid crop insurance product, conditional on purchasing certified seeds. We find that farmers increase effort—increasing total investments and taking more land in production. In addition to adopting more certified seeds, they also invest more in complementary inputs such as fertilizer and hired-in farm-machinery and non-farm labour. We find limited evidence of a change in farming intensity. For example, there is no evidence of ‘crowding-out’ of effort or inputs on a per-hectare basis, even if the indemnity-based component of the insurance product potentially gives rise to asymmetric information problems (moral hazard). We also document that ex post willingness to pay for the insurance product has increased for the treatment group. This suggests that learning about the benefits of (subsidized) insurance outweighs any anchoring effects on the zero price during the pilot study.

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