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Study Overview

Title:
Enhancing access to index-based weather agricultural insurance insurance in Burkina Faso: a new marketing approach
Study is 3ie funded:
No
Study ID:
RIDIE-STUDY-ID-5c90b74be830d
Initial Registration Date:
03/19/2019
Last Update Date:
12/30/2018
Study Status:
In Development
Location(s):
Burkina Faso
Abstract:
Large segments of the population in developing countries, especially in rural areas, have a high level of vulnerability to weather-related shocks but have limited means to insure themselves against them. In recent years, microfinance institutions have experimented with insurance products, in particular rainfall index insurance, to address this need in different parts of the world. But the uptake of these products has generally been very low because of liquidity constraints, lack of trust in insurance provider and unfamiliarity with formal financial products. We study how existing ties between urban migrants and rural farmers can be used to provide the latter improved access to formal insurance. The study is motivated by well-established evidence regarding the use of rural-urban migration as a risk-coping and risk-management strategy and that rural households in developing countries often rely upon assistance from close relatives among urban migrants to cope with adverse weather-related shocks.
Categories:
Finance
Social Protection
Additional Keywords:
Agricultural productivity, Consumption, Microinsurance markets, Indexed insurance, Rainfall, Migration, Informal insurance networks
Secondary ID Number(s):
3IE Project ID: TW13.1018

Principal Investigator(s)

Name of First PI:
Harounan Kazianga
Affiliation:
Oklahoma State University
Name of Second PI:
Zaki Wahhaj
Affiliation:
University of Kent

Study Sponsor

Name:
International Initiative for Impact Evaluation (3IE)
Study Sponsor Location:
India

Research Partner

Name of Partner Institution:
Innovation for Poverty Action (IPA)
Type of Organization:
NGO-international
Location:
Burkina Faso
Intervention

Intervention Overview

Intervention:
The intervention is based on an existing rainfall index insurance marketed by PlaNet Guarantee to farmers. Subscribers can insure themselves against rainfall shortages in a specified location within the organisation’s coverage area. Payouts are triggered if rainfall falls below a threshold specified at three stages of plant growth. The intervention consists in marketing the product in villages and to urban migrants who originate from these villages. All rural farmers in the study villages and urban migrants from these villages are eligible for the intervention. Marketing will proceed as follows: i) a group presentation explaining the concept of insurance, and details about how PG’s product works; ii) follow-up telephone calls with participants to gauge their interest in the product; iii) for participants who express interest in a subscription, scheduled house visits to carry out the subscription process. Participants from the same village will all be exposed to the same treatment and can purchase the product only for their own household. Urban migrants who originate from the same village may be subject to different treatments and can name a beneficiary other than themselves.
Theory of Change:
The first key hypothesis of our theory of change, is that urban migrants with rural family members engaged in farming will find rainfall index insurance attractive at market prices. This hypothesis was tested in a pilot study, and we found that the cost per subscription is lower when the product is marketed to urban migrants. We hypothesize that evidence of this nature, when presented to the key industry players, will attract private insurers to the market and thus increase the supply of formal index-based insurance without subsidization by governments or international development agencies. For urban migrants who assist their rural families in times of need, access to rainfall index insurance will reduce their risk burden, and thus allow them to pursue more profitable economic opportunities. Rural farmers who obtain access to formal insurance via their urban relatives will be able to smooth consumption more effectively. In addition, they will be encouraged to make farming and investment decisions that involve more risk but entail higher expected profits. Uptake of the insurance product by urban migrants would also provide rural farmers indirect experience with formal insurance. We hypothesize that this experience can help rural farmers improve their understanding of formal insurance, trust in formal insurance providers and, in the long run, improve direct uptake by rural farmers. In addition, the evaluation will allow us to investigate how uptake of insurance affects urban-rural transfers, and its effect on investments, production choices and consumption of rural households. As we are not planning to conduct an endline survey with urban migrants, the evaluation will not tell us how the product affects their economic decisions. Based on our findings from the Phase 2 evaluation, we plan to engage in communication and engagement activities with policymakers and key players in the insurance industry which will allow us to explore the final step of our theory of change.
Multiple Treatment Arms Evaluated?
Yes

Implementing Agency

Name of Organization:
PlaNet Guarantee
Type of Organization:
NGO (International)

Program Funder

Name of Organization:
http://www.planetguarantee.com/
Type of Organization:
NGO (International)

Intervention Timing

Intervention or Program Started at time of Registration?
No
Start Date:
04/01/2019
End Date:
03/31/2022
Evaluation Method

Evaluation Method Overview

Primary (or First) Evaluation Method:
Randomized control trial
Other (not Listed) Method:
Additional Evaluation Method (If Any):
Other (not Listed) Method:

Method Details

Details of Evaluation Approach:
The evaluation exploits the random assignment of rural households and their migrant relatives to treatment and control groups. First, we assign villages into a treatment group (where the standard insurance product will be marketed) and into a control group. Urban migrants from both treatment and control villages will be randomly assigned to two groups. The first migrant group will receive offers to purchase the insurance product to cover their rural relatives, but the second migrant group will not (the control). We denote by V0 and V1 the control and the treated villages, and by U0 and U1, the control and treated migrants. Thus, considering pairs of rural farmers and urban migrants, we obtain four experimental groups: V0U0 (the insurance product is not marketed either to rural households or their migrant relatives); V0U1 (the insurance is marketed to the urban migrants, but not to their rural relatives); V1U0 (the insurance is marketed to rural households, but not to their urban relatives); V1U1 (the insurance is marketed both to rural households and their urban relatives). Randomization will occur at the village-level in the rural areas, and at the migrant-level in urban areas.
Outcomes (Endpoints):
Intermediate outcomes ? Take-up of the rainfall index insurance which is measured as 1 if a paired rural household-urban migrant link purchases insurance and 0 otherwise. ? The value of the capital or acreage insured, measured in CFA insured for the capital, and in hectares for the acreage. Final outcomes i. Risk coping and management mechanisms a. Land area allocated to food crops and cash crops; and to crops with different levels of sensitivity to variations in rainfall; b. Seasonal migration from rural households and participation in non-farm economic activities; c. Off-farm activities; d. Education: measured as enrollment of children between 6 and 15 years old; e. Livestock (herd size and sales); ii. Investments in agriculture a. Cultivated area b. Fertilizer use, measured in kilograms of fertilizers per hectare of cultivated land; c. Labour input d. Improved seeds, measured as acreage planted with improved varieties; e. Agricultural productivity per hectare. iii. Consumption smoothing and income growth a. Consumption smoothing by rural farmers; b. Income growth.
Unit of Analysis:
Rural household-urban migrant pair
Hypotheses:
Unit of Intervention or Assignment:
rural villages and urban migrants
Number of Clusters in Sample:
254 pairs of rural household-urban migrant
Number of Individuals in Sample:
1600 rural households (in 80 villages) and 1016 urban migrants
Size of Treatment, Control, or Comparison Subsamples:
191 pairs of rural households-urban migrants in treatment (3 arms) and 63 pairs of rural households-urban migrants in control,

Supplementary Files

Analysis Plan:
PreAnalyisPlan-Version_123018.pdf
Other Documents:
Data

Outcomes Data

Description:
The data that will be used will consist of i) rural household survey, ii) a survey of urban migrants and iii) administrative data on subscription.
Data Already Collected?
No
Data Previously Used?
Data Access:
Data Obtained by the Study Researchers?
Data Approval Process:
Approval Status:

Treatment Assignment Data

Participation or Assignment Information:
No
Description:
The rural and the urban surveys will contain information on village treatment assignment and on urban migrant assignment. The information on treatment uptake will come from administrative data.
Data Obtained by the Study Researchers?
No
Data Previously Used?
Data Access:
Data Obtained by the Study Researchers?
Data Approval Process:
Approval Status:

Data Analysis

Data Analysis Status:

Study Materials

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Registration Category

Registration Category:
Prospective, Category 1: Data for measuring impacts have not been collected
Completion

Completion Overview

Intervention Completion Date:
Data Collection Completion Date:
Unit of Analysis:
Clusters in Final Sample:
Total Observations in Final Sample:
Size of Treatment, Control, or Comparison Subsamples:

Findings

Preliminary Report:
Preliminary Report URL:
Summary of Findings:
Paper:
Paper Summary:
Paper Citation:

Data Availability

Data Availability (Primary Data):
Date of Data Availability:
Data URL or Contact:
Access procedure:

Other Materials

Survey:
Survey Instrument Links or Contact:
Program Files:
Program Files Links or Contact:
External Link:
External Link Description:
Description of Changes:

Study Stopped

Date:
Reason: