| Abstract: |
Most index-based insurance products have been developed without giving
explicit attention to gender. However, there is ample evidence that shocks
affect men and women differently and that they allocate resources in different
ways. In Bangladesh it is often assumed that women are less involved in
agriculture, and therefore agricultural insurance might not be of interest to
rural women. However, this assumption has not been tested in the field. This
paper draws from a field research experiment to examine the gendered aspects
of willingness to pay for index-based insurance in Bangladesh. Participants
were presented with risky lotteries and a specific insurance contract and were
asked to choose how much (if any) of the insurance they wanted to buy at a
given price. The probability structure (whether the risk was catastrophic or
moderate and whether there was high or low basis risk) varied within sessions.
The price of the insurance varied across sessions. Each participant was also
administered a short questionnaire, which collected information on demographic
characteristics, risk preferences, agricultural risks, knowledge of insurance
products, and asset ownership. Ninety-seven percent of the participants in the
study decided to buy agricultural insurance, with no significant differences
between men and women, even though women are less involved in agricultural
decisionmaking. We find a small decrease in take-up for the low-probability
event, driven by the women in the sample. When we examine the number of units
bought, we find that men were likely to buy more units than women. Total
wealth, as captured by total land owned, had no effect on units bought.
However, among women total wealth mattered and had a positive correlation.
Finally, we find that women had less education and lower financial literacy
than their male counterparts, as well as less background in understanding
agricultural risk. This placed them at a disadvantage when making insurance
purchase decisions. |
| Keywords: |
gender, women, insurance, risk, finance, index insurance, risk preference, economic shocks, Willingness to pay, |