Details zur Publikation

Referenztyp Zeitschriften
DOI / URL Link
Creative Commons Lizenz creative commons licence
Titel (primär) Informal risk-sharing between smallholders may be threatened by formal insurance: Lessons from a stylized agent-based model
Autor Will, M.; Groeneveld, J.; Frank, K.; Müller, B.;
Journal / Serie PLOS ONE
Erscheinungsjahr 2021
Department OESA; iDiv;
Band/Volume 16
Heft 3
Sprache englisch;
Supplements https://doi.org/10.1371/journal.pone.0248757.s001
https://doi.org/10.1371/journal.pone.0248757.s002
https://doi.org/10.1371/journal.pone.0248757.s003
https://doi.org/10.1371/journal.pone.0248757.s004
https://doi.org/10.1371/journal.pone.0248757.s005
Abstract Microinsurance is promoted as a valuable instrument for low-income households to buffer financial losses due to health or climate-related risks. However, apart from direct positive effects, such formal insurance schemes can have unintended side effects when insured households lower their contribution to traditional informal arrangements where risk is shared through private monetary support. Using a stylized agent-based model, we assess impacts of microinsurance on the resilience of those smallholders in a social network who cannot afford this financial instrument. We explicitly include the decision behavior regarding informal transfers. We find that the introduction of formal insurance can have negative side effects even if insured households are willing to contribute to informal risk arrangements. However, when many households are simultaneously affected by a shock, e.g. by droughts or floods, formal insurance is a valuable addition to informal risk-sharing. By explicitly taking into account long-term effects of short-term transfer decisions, our study allows to complement existing empirical research. The model results underline that new insurance programs have to be developed in close alignment with established risk-coping instruments. Only then can they be effective without weakening functioning aspects of informal risk management, which could lead to increased poverty.
ID 24386
dauerhafte UFZ-Verlinkung https://www.ufz.de/index.php?en=20939&ufzPublicationIdentifier=24386
Will, M., Groeneveld, J., Frank, K., Müller, B. (2021):
Informal risk-sharing between smallholders may be threatened by formal insurance: Lessons from a stylized agent-based model
PLOS One 16 (3), e0248757