Risk and ambiguity aversion behavior in index-based insurance uptake decisions: Experimental evidence from Ethiopia

T.K. Belissa, Robert Lensink, M. van Asseldonk*

*Bijbehorende auteur voor dit werk

OnderzoeksoutputAcademicpeer review

11 Citaten (Scopus)
142 Downloads (Pure)


Index-based insurance (IBI) is an innovative pro-poor climate risk management strategy that suffers from low uptake. Evidence on the role of behavioral impediments in adoption of IBI is scant. We conducted lab-in-the-field experiments with 1139 smallholders out of whom 596 have adopted IBI in Ethiopia to elicit their risk and ambiguity aversion behavior, and examine whether risk and/or ambiguity aversion can explain actual IBI uptake decisions. Our study suggests that an increase in risk-aversion increases uptake, but an increase in ambiguity-aversion lowers uptake of IBI. We also find evidence that an increase in risk aversion speeds-up the uptake of IBI, while an increase in ambiguity aversion delays the adoption of IBI.
Originele taal-2English
Pagina's (van-tot)718-730
Aantal pagina's13
TijdschriftJournal of Economic Behavior & Organization
Vroegere onlinedatum3-aug.-2019
StatusPublished - dec.-2020

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