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Rainfall is an important source of covariate shock in developing countries. Insurance against a rainfall index has, therefore, held much promise as a formal insurance product to protect the livelihoods of poor farmers. But how good is rainfall as a measure of covariate shocks? The imperfect...
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This paper provides novel evidence on how risk exposure shapes the demand for index-based weather insurance. The focus … weather events that cause high livestock mortality. Using a two-way fixed effect model and country-wide district-level data … weather conditions occurring in the months preceding the end of the insurance sales period. The effect is neither driven by …
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