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The impact of index‐insured loans on credit market participation and risk‐taking
Author(s) -
Gallenstein Richard A.,
Flatnes Jon Einar,
Dougherty John P.,
Sam Abdoul G.,
Mishra Khushbu
Publication year - 2021
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/agec.12611
Subject(s) - index (typography) , business , investment (military) , tanzania , actuarial science , finance , economics , world wide web , computer science , socioeconomics , politics , political science , law
Index‐insured loans offer considerable advantages over standalone insurance policies for improving farmers’ access to agricultural credit. However, research on demand for such products and their impact on profitable investment decisions has been limited and conflicting. In this article, we investigate the impact of index insurance on demand for credit and investment decisions using a lab‐in‐the‐field experiment conducted in rural Tanzania. We find that index insurance increases demand for credit and high‐risk high‐return investments.