The Spillover Impact of Index Insurance on Agricultural Investment by Cotton Farmers in Burkina Faso

Quentin Stoeffler, Michael Carter, CATHERINE GUIRKINGER, Wouter Gelade

Research output: Contribution to journalArticlepeer-review

Abstract

This paper examines whether agricultural insurance can boost investment by small scale farmers in West Africa. It is based on a randomized evaluation designed to analyze the impacts of index insurance for cotton farmers in Burkina Faso. No impact of insurance was found on cotton, but, consistent with microeconomic theory, significant spillover impacts on investment in other agricultural activities were measured. Furthermore, the effects of insurance payouts on farmers hit by a shock confirm the potential of index insurance as a risk-management tool. However, this research uncovers important flaws in the implementation of the project that limited its impact on cotton. Overall, this study suggests a promising role for index insurance in stimulating investment, but also draws attention to key challenges to the efficient delivery of insurance to small farmers. Finally, the study’s hybrid, mixed methods RCT offers lessons for the evaluation of complex interventions where trust, understanding, and timing are all important.
Original languageEnglish
JournalThe World Bank Economic Review
Early online date4 Jun 2021
DOIs
Publication statusE-pub ahead of print - 4 Jun 2021

Fingerprint

Dive into the research topics of 'The Spillover Impact of Index Insurance on Agricultural Investment by Cotton Farmers in Burkina Faso'. Together they form a unique fingerprint.

Cite this