Investigators at Duke-National University of Singapore Medical School Discuss Findings in Insurance (Demand for Weather Index Insurance Among Smallholder Farmers Under Prospect Theory): Insurance

2022 OCT 05 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Researchers detail new data in Insurance. According to news reporting originating in Singapore, Singapore, by NewsRx journalists, research stated, “Index insurance offers an innovative risk management solution for uninsured agricultural weather risk. We investigate the theoretical relationship between prospect theory risk preferences and characteristics of index insurance.”

Financial support for this research came from International Initiative for Impact Evaluation (3ie) through Phase 1 of Thematic Window 13: Agricultural Insurance: As-sessing the Impact of Programmes Targeted at Smallholder Farmers.

The news reporters obtained a quote from the research from the Duke-National University of Singapore Medical School, “We pair these theoretical findings with data from a lab-in-the-field experiment in Kenya. Empirically, we find that insurance de-mand is decreasing in loss aversion, and the negative marginal effect of loss aversion on insurance demand increases with basis risk and the insurance premium.”

According to the news reporters, the research concluded: “Our theoretical and empirical results combined illustrate the importance of considering both risk and loss aversion, as well as basis risk, in understanding index insurance decisions.(.”

This research has been peer-reviewed.

For more information on this research see: Demand for Weather Index Insurance Among Smallholder Farmers Under Prospect Theory. Journal of Economic Behavior & Organization, 2022;202:82-104. Journal of Economic Behavior & Organization can be contacted at: Elsevier, Radarweg 29, 1043 Nx Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Journal of Economic Behavior & Organization - http://www.journals.elsevier.com/journal-of-economic-behavior-and-organization/)

Our news correspondents report that additional information may be obtained by contacting Soye Shin, Duke-National University of Singapore Medical School, Program Hlth Serv & Syst Res, 8 Coll Rd, Singapore 169857, Singapore. Additional authors for this research include Nicholas Magnan, Conner Mullally and Sarah Janzen.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jebo.2022.07.027. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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