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Research activities

The Facility offers small research grants on a competitive basis for academics, particularly from developing countries, to analyze various microinsurance issues. Besides answering key questions in the Facility's research agenda, these grants are intended to increase the supply of knowledgeable microinsurance experts and promote microinsurance in academic circles.

The Facility received more than 197 proposals for studies to be conducted in 30 developing countries. Since we were only able to award grants to a small percentage of those who applied, the competition was fierce, leaving several interesting proposals unfunded. Those selected were focused research projects that responded to specific questions of the Facility's learning agenda.

The short description of the selected proposals (with references to the Facility's learning agenda in brackets) is as follows.

Research areas:  Consumer education
Health insurance
Agriculture insurance


Consumer education

Title:Impact of educational intervention on knowledge, attitude towards, and willingness to pay for micro health insurance among low-income informal workers in urban Bangladesh
By: Jahangir Khan, Ziaul Islam, Rukhsana Gazi, Mohammad Khurshid Alam, International Centre for Diarrhoeal Disease Research, Bangladesh
Tracey Lynn Perez Koehlmoos, Centre for Health and Population Research, Bangladesh
Core research topic: Impact of education campaign on insurance literacy and demand (2.3, 2.4, 3.5)
Country of study:Bangladesh
Completion date:March 2011
Description:With growing urban migration, the need for health security of laborers in the low-income informal sector is becoming more acute. Despite its potential, demand for health microinsurance is still latent. The aim of this project is to assess the impact of an educational intervention program on knowledge, skills, attitudes, willingness to pay and actual take up of existing health microinsurance products. The study will focus on workers from manufacturing (garments), transport (rickshaw/human-driven tricycle pullers), wholesale and retail business (shopkeepers and related) and construction workers. Treatment and control groups will be created by randomly selecting two workplaces or cooperatives of each of the four occupational groups. Econometric analyses will be applied for identifying the determinants of health-risk and its burden as well as for testing the inference about significant change between control and intervention groups.
Title:Financial literacy for weather insurance
By: Shawn Cole, Harvard Business School, USA
Sarthak Gaurav, Indira Gandhi Institute of Development Research, India
Core research topic: Impact of financial literacy on weather-index insurance take-up and renewals (2.3)
Country of study:India
Completion date:April 2010
Description:Scaling-up formal risk management instruments like weather insurance requires an inquiry into the causes of low take-up rates among agricultural households. Measuring financial literacy and evaluating its impact on financial behaviour poses formidable challenges, as it is often closely correlated with confounding factors, such as liquidity constraints and indebtedness, which affect risk-management decisions. This study will attempt to establish a causal measure of the impact of financial literacy on risk-management behaviour by testing a financial literacy module on weather risk hedging with villagers in Gujarat, India.

Health insurance

Title:Joint liability and the demand for health insurance in micro-credit groups
By: Judith Lammers, Wendy Janssens, Amsterdam Institute for International Development, University of Amsterdam
Lucas Albani Katera, Research on Poverty Alleviation (REPOA), Tanzania
Core research topic: Impact of peer pressure, health shocks and loan repayment histories on demand for health microinsurance (2)
Country of study:Tanzania
Completion date:January 2011
Description:The demand for health insurance in developing countries remains low even when offered at affordable premiums. This research investigates whether the provision of insurance through existing micro-credit groups enhances enrolment through peer pressure in the context of joint liability. It also studies whether own and others’ health shock and loan repayment histories influence enrolment decisions. The data are based on framed micro-finance games with real payoffs that will be conducted among micro-credit group participants in Tanzania.
Title:Targeting the poor by community-based health insurance schemes in Cameroon
By: Fondo Sikod,  Ibrahim Abba, University of Yaoundé II, Cameroon
Core research topic: Access by the poor (1.1) and determinants of demand for health microinsurance (2.1)
Country of study:Cameroon
Completion date:January 2011
Description:This study will generate evidence useful in assessing effectiveness of government interventions in Cameroon aimed at improving access to health services for the poor through promotion of community based health insurance schemes. Using, among others, contingent valuation method on primary household data, the research will evaluate targeting practices as well as investigate to what extent the poor join health mutuals in Cameroon and what are the determinants of the demand.
Title:Does microinsurance help the poor? Evidence from the targeted health insurance program in Vietnam 2004 – 2008
By: Tra Pham, Thong Pham, School of Economics and Business Administration, Cantho University, Vietnam
Core research topic: Impact of health insurance on health seeking behaviors and vulnerability reduction (1.2, 1.3, 1.4)
Country of study:Vietnam
Completion date:January 2011
Description:The study aims to assess benefits of a targeted health microinsurance program in Vietnam, namely the Health Care for the Poor Program, using household survey data 2004-2006-2008. Based on both parametric and non-parametric approaches, the study empirically examines: 1) whether the program improves health seeking behaviors of the poor with respect to access to health care, out-of-pocket health spending, and preventive care behaviors; 2) whether the program reduces the health risk exposure of the poor through lowering the chance of assets depletion and of falling into severe debt when confronted with a health shock, and 3) how the program’s effects can be identified as intended effects due to the program participation and spillover effects due to the coverage of the program in the community of residence.
Title:Integrating innovative health care provider payment systems into the expansion of community-based health insurance in Burkina Faso
By: Paul Jacob Robyn, Rainer Sauerborn, Aurèlia Souares, University of Heidelberg, Germany
Ali Sié, Germain Savadogo, Nouna Health Research Center (CRSN), Burkina Faso
Till Barnighausen, Harvard School of Public Health
Core research topic: Health insurance payment systems, health worker incentives (3.6)
Country of study:Burkina Faso
Completion date:January 2011
Description:The study will investigate methods to integrate innovative health care provider payment systems into the expansion of community-based health insurance (CBHI) in Burkina Faso. Established in 2004, a CBHI in Nouna district plans to extend insurance coverage over the next two years from the 12 primary and secondary health facilities currently contracted to all 20 facilities in the district.  However, previous studies in Nouna district showed that the current payment scheme is unattractive to providers. Hence, it is important to understand how to maximize health worker motivation and support through improving the current payment structure. To answer this question, different interventions will be implemented in a randomized way.
Title:Trust, literacy and demand for microinsurance in Senegal 
By: Philippe LeMay-Boucher, Heriot-Watt University, UK
Olivier Dagnelie, Institute for Economic Analysis, Barcelona Graduated School of Economics, Spain
Michel Tenikue, CEPS/INSTEAD, Luxembourg
Mohamadou Sall, Cheikh Anta Diop University of Dakar, Senegal
Core research topic: Determinants of demand for health microinsurance (2.1, 2.2, 2.3)
Country of study:Senegal
Completion date:February 2011
Description:Health shocks have devastating impact on poor livelihoods. Taking advantage of the expansion of the health microinsurance scheme of PAMECAS, a leading MFI in Senegal, this study aims to understand factors influencing demand for this kind of product. It goes beyond observable characteristics and declarations of consumers usually used in this type of research and focuses on discount rate preferences, risk aversion, subjective expectations, and trust behaviors to be observed with a help of experimental games.
Title:Economic value of willingness to pay for a community-based prepayment scheme in rural Cameroon
By: Hermann P. P. Donfouet, University of Yaoundé II, Cameroon
Ephias M. Makaudze, University of Western Cape, South Africa
Core research topic: Determinants of willingness to pay for health insurance (2.4)
Country of study:Cameroon
Completion date:June 2010
Description:In Cameroon's rural areas, poor people do not have access to high quality health care services due to their limited financial capacity. Community-based insurance are one strategy to increase access to health care and alleviate poverty. The objective of the study is to assess the willingness of rural households to pay for health insurance. Using self-collected household data, this study will contribute to a greater understanding of what motivates clients in their purchasing decisions.
Title:Barriers to access health care and the role of subsidized health insurance for farmers
By: Aurélia Lépine, Alexis Le Nestour, CERDI, France
Samba Mbaye, Gaston Berger University, Senegal
Core research topic: Demand for health insurance (2.1) and potential client value from a new subsidized health insurance scheme (1.1)
Country of study:Senegal
Completion date:July 2010
Description:This study will support the development of a new health insurance scheme for farmers by the Government of Senegal, which subsidizes 70% of the premium. During this project, baseline household data will be collected to analyze access barriers and demand for health care in a rural district in Senegal, with a special focus on analyzing the effects of out-of-pocket expenditures on health care access. The results will help shape the product design and explore potential client value from the new government scheme.
Title: Microinsurance utilization in Nicaragua: the demand for and effects of insurance enrolment among informal sector workers
By:Rebecca L. Thornton, Anne Fitzpatrick, University of Michigan, USA
Barbara Magnoni, EA Consultants, USA
Core research topic:Impact of health insurance on healthcare utilization by children (1.2); impact of perceived quality of health care on insurance client retention (2); sustainable pricing of health microinsurance (3.4)
Country of study:Nicaragua
Completion date:April 2010
Description:This project will analyze data collected in two phases of a randomized evaluation of insurance take-up and retention among informal sector workers in Managua, Nicaragua. Using two rounds of existing data collected among 4,000 uninsured workers, this study aims to: 1) measure the causal effects of insurance on the health care utilization of children; 2) analyze health claims data collected from clinics to provide insight on sustainable pricing solutions; and 3) analyse how low retention rates are linked to the quality of care received at public health institutions. The results of this study will be useful to private and public sector insurers interested in developing health insurance products for informal workers.
Title:Understanding the effects of adverse selection and moral hazard on micro-health insurance.
By:Andreas Madestam, Bocconi University, Italy
Erik Grönqvist, Uppsala University, Sweden
Core research topic:Information asymmetries, moral hazard, adverse selection and their impact on scheme viability (3.1, 3.6); Impact of microinsurance on health and income uncertainty (1.2, 1.3)
Country of study:Kenya
Completion date:February 2011
Description:To ensure sustainable delivery and equitable access to microinsurance, it is important to understand potential constraints, such as information asymmetries, that may hamper its success. This study will provide initial assessments of the intended beneficiaries' price and risk elasticity, risk profiles, as well as information on educational attainment, health preferences, and occupation. This deliverable will in turn feed into the design of a larger field experiment. By successfully estimating the presence and importance of moral hazard and adverse selection, we will better understand the viability of health insurance in a developing country context.
Title:Demand impacts of introducing complex bundled microfinance loans in India
By: Esther Duflo, Abhijit Banerjee, Richard Hornbeck, J-PAL, Massachusetts Institute of Technology
Core research topic:Effects of bundling health insurance with microcredit (1.1, 1.2, 2.1, 3.1)
Country of study:India
Completion date:February 2012
Description:This research project seeks to determine the effects of bundling health insurance with microcredit, on both demand and supply sides. Are households more willing to invest in higher return activities when they have the health insurance cover? Do they prefer the bundled offer or do they want to have access only to microcredit? Do microfinance organizations suffer from adverse selection when they provide health insurance? This research is being done within the context of a broader randomized controlled trial in Hyderabad, India, studying health, health insurance and microcredit.

Agriculture insurance

Title:Examining underinvestment in agriculture: Measuring returns to capital and insurance in Ghana
By: Robert Darko Osei, Isaac Osei-Akoto, Institute of Statistical, Social and Economic Research, University of Ghana
Dean Karlan, Christopher Udry, Innovations for Poverty Action, Yale University
Core research topic: Impact of agriculture insurance (1.2, 1.3), determinants of demand (2.1, 2.2, 2.3, 2.4)
Country of study:Ghana
Completion date:June 2011
Description:This study builds on an ongoing pilot study being conducted by Innovations for Poverty Action in northern Ghana, to evaluate the impact of a formal insurance mechanism on farmers’ investment decisions. A simple rainfall index insurance policy will be offered to randomly-selected farmers, at a variety of prices. As well as looking for direct impact of the insurance offer on investment and agricultural output, the study will examine questions of demand and take-up, how these are affected by trust and social connections between participants, and to what extent rainfall index insurance may substitute or compliment existing insurance mechanisms.
Title:Impacts of trust on agricultural insurance take-up
By: Alain de Janvry, Elisabeth Sadoulet, Jing Cai, University of California, Berkeley
Core research topic: Impact of trust on take-up (2.2)
Country of study:China
Completion date:January 2011
Description:In order to scale up micro-insurance products to cover larger numbers of poor people, it is crucial to understand why people do or do not take up insurance products when offered. An often mentioned constraint in selling insurance to poor households is a lack of trust in insurance providers. This study aims at establishing a causal measure of the effect of trust on people’s take-up decisions, and explore the best instruments and mechanisms to build trust, through a series of randomized experiments which will be implemented within the context of an innovative area-based yield rice insurance contract offered to farmers in the rural areas by People’s Insurance Company of China.
Title:Risk preferences and demand for insurance under price uncertainty: an experimental approach for the coffee and cocoa farmers in Côte d’Ivoire
By: Kouame Euphrasie, Aka Narcisse Komenan, University of Cocody, Côte d’Ivoire
Core research topic: Client value (1.1), risk perception and determinants of demand for agriculture insurance (2.1, 2.3, 2.4)
Country of study:Côte d’Ivoire
Completion date:February 2011
Description:In Côte d’Ivoire, rural households producing cocoa are exposed to a variety of income uncertainties; the most common being uncertainty due to cocoa price variations. Despite the contribution of cocoa to household livelihoods in Côte d’Ivoire and the risks inherent to cocoa production, price insurance markets are missing. As a result, farmers rely heavily on traditional risk management strategies which are suboptimal. Using primary data collected at the field level, this study is an attempt to identify and propose an effective mechanism to shield producers from price risks. However, the operational feasibility of such mechanism requires knowledge of farmers’ risk preferences, decision making under uncertainty, and willingness to pay for insurance in order to respond fully to their needs.
Title:Subjective probabilities and the demand for insurance
By: Zaki Wahhaj, Ingo Outes-Leon, Oxford University, UK
Core research topic: Risk perception, determinants of demand for agriculture insurance (2.1, 2.3)
Country of study:Ethiopia
Completion date:January 2011
Description:Early field experiments introducing micro-insurance contracts in rural settings have found that demand for formal insurance is very low in spite of widespread evidence of uninsured risk, and suggest credit constraints, low levels of trust and existing informal insurance as potential explanations for low take-up rates. This study investigates a previously unexplored cause that differences in subjective probabilities over the insured event between individuals and the insuring firm, might crowd out demand for formal insurance. A range of behavioural games will be designed to measure subjective probabilities across a sample of farmers in rural Ethiopia.
Title:Does micro-credit increase bonded child labour in absence of microinsurance?
By: Sayan Chakrabarty, Shahjalal University of Science and Technology, Bangladesh
Core research topic: Impact of microinsurance on reducing child labour (1.4)
Country of study:Bangladesh
Completion date:April 2010
Description:This research aims to discover whether access to microcredit might increase bonded child labour in the absence of microinsurance by comparing borrowers with and without microinsurance. Climate related risks are a major source of vulnerability for rural households in northern Bangladesh, which is prone to Monga (seasonal food insecurity). As a result, child labour is prevalent, especially among microcredit clients who need to generate more income to repay their loans. This study collects household data to explore if there are differences in the prevalence of child labour depending on whether the households have insurance.
Title:Experimenting with Group Crop Insurance Design
By: Daniel Clarke, Rocco Macchiavello, Oxford University, UK
Core research topic: Optimal group contracts for crop insurance products (1.1, 3.1)
Country of study:Ethiopia
Completion date:May 2010
Description:Economic theory predicts that microinsurers could provide optimal insurance contracts by acting as a reinsurer to groups of individuals who have access to information about each other, such as extended families or community organisations. This study explores the potential of developing new insurance contracts that pay out to groups of farmers above a certain group-level co-payment. This study seeks to understand how well group excess of loss-style crop insurance performs relative to individual insurance (including weather index insurance). As a precursor to design and pilot test new crop insurance products, the project will set up laboratory experiments with farmers to better understand the potential of group microinsurance.
Title:Risk-Modelling Crop Loss in Ghana
By:James R. Jones, Illinois State University, Katie School of Risk Management and Insurance, USA
Core research topic:Correlations between rainfall, crop yield, crop prices, agriculture income, morbidity and mortality - to develop more accurate weather index insurance (3.7)
Country of study:Ghana
Completion date:January 2010
Description:This project will collect and analyze weather event, crop loss, and other health and economic data in Ghana. This research will add value by fully developing new correlations among these variables and comprehensive indices, which will be useful to design weather-indexed products to mitigate agricultural losses. By reducing covariant risk, these insurance products would enable banks to lend to farmers in Ghana and other drought prone regions.
Title:Remote sensing in agriculture insurance
By:Mangesh Patankar, Centre for Insurance and Risk Management, India
Gargi Upadhyay, Indian Space Research Organization, India
Kunal Soni, IFFCO Tokio General Insurance Limited, India
Core research topic:Comparing accuracy of remote sensing based crop insurance with weather index insurance (3.7); client appreciation of remote sensing based crop insurance products (2)
Country of study:India
Completion date:May 2010
Description:Crop insurance using satellite imagery is expected to more accurately compensate farmers' actual losses than normal weather index insurance products. However, few experiments on such products have happened in developing countries. One of the barriers to commercializing such products is convincing farmers to trust the process of claims management. The proposed research project studies this problem systematically in a few remote Indian districts and tries to propose solutions. Furthermore, it tests, quantitatively, the accuracy of the product by comparing it to hypothetically designed weather index insurance products. The research is expected to provide insights for crop insurers and open up a new market.
Title:Integrating savings and insurance
By:Jeremy Tobacman, University of Pennsylvania, USA
Daniel Stein, London School of Economics, UK
Core research topic:Low-income households preferences for index insurance and savings (2.1, 2.3)
Country of study:India
Completion date:October 2010
Description:Index-based weather insurance has the potential to help farmers mitigate their largest risks. Experience from three years of randomized field evaluations in Gujarat, India, implies that unfamiliarity with insurance is a major impediment to adoption. However, the population has experience and familiarity with savings as a risk-mitigation strategy. This project intends to undertake a series of laboratory experiments to assess subjects' preferences for insurance and savings, with a hope to understand the optimal mix. This information will shed light on the possibility of an integrated financial product that would combine the ease and familiarity of savings with the risk-mitigation function of insurance.
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Last update: 01.11.2010 ^ top