Long-term Effects of Index-Based Livestock Insurance

Last registered on April 13, 2023


Trial Information

General Information

Long-term Effects of Index-Based Livestock Insurance
Initial registration date
April 04, 2023

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
April 13, 2023, 3:35 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.



Primary Investigator

Independent Researcher

Other Primary Investigator(s)

PI Affiliation
Cornell University
PI Affiliation
Utrecht University
PI Affiliation
Policy Studies Institute

Additional Trial Information

Start date
End date
Secondary IDs
Prior work
This trial is based on or builds upon one or more prior RCTs.
For the hundreds of millions of pastoralists, loss of livestock due to shocks is a primary concern because livestock can represent a large portion of household wealth and productive capital. In sub-Saharan Africa, drought is a main cause of livestock losses and has been shown to drive pastoral households into poverty, and in some cases, trap them there. Insurance is a promising financial tool that is used in many agricultural settings to mitigate the impacts of drought but had not been available to most pastoralists because these had yet to be a cost-effective model for offering it. The Index Based Livestock Insurance (IBLI) product was piloted in northern Kenya and southern Ethiopia starting in 2010 and 2012, respectively. Since then, the product has grown in scale, offering access to formal insurance coverage to millions of pastoralists. Consistent with the literature on insurance coverage, studies of the pilots have shown that IBLI coverage benefits clients in several ways, but there have been no studies on the long-term impacts of access to IBLI. In this study, we aim to determine the impacts that IBLI has had on its clients over the 10 + years that is has been available in the Horn of Africa. Specifically, we will test if the impacts identified during project activities in the study region between 2010 and 2015 have persisted. Our empirical approach to causal identification relies on variation in IBLI purchases caused by an intervention that was both randomized at the household level and increased IBLI uptake during the pilot period.
External Link(s)

Registration Citation

Barrett, Christopher et al. 2023. "Long-term Effects of Index-Based Livestock Insurance." AEA RCT Registry. April 13. https://doi.org/10.1257/rct.11184-1.0
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Experimental Details


The Index Based Livestock Insurance (IBLI) product is a commercial insurance product that makes insurance payouts based on remotely sensed NDVI data. The product is sold during two sales windows each year and provides coverage for 12 months, which containes two potential payout periods. This study tests for the long-term impacts of IBLI.
Intervention Start Date
Intervention End Date

Primary Outcomes

Primary Outcomes (end points)
Herd size and composition
Total household income
Maximum years of education within a household
Primary Outcomes (explanation)
Herd size is measured by the total number of animals a household herds, and the number of animals a household owns. We aggregate across animal types by cattle market-value equivalent.3 We construct variables of herd composition – represented by the share of the value each animal type among the total value of livestock holding.

Total household income is examined as a measure of material well-being of the household. We construct this measure by aggregating the income of a household from various income sources over the year. We winsorize the value at the 99th percentile to address the effect of extreme values. For comparability, US dollar is used as a currency.

Human capital accumulation is a long-term outcome. If a household changed investments in human capital due to IBLI uptake, it could have an impact on the maximum years of education. We collected information of highest level of education completed by each household member, so we take the maximum of it to construct the variable.

Secondary Outcomes

Secondary Outcomes (end points)
Herd management expenditure
Annual milk income per livestock market-value equivalent
Livestock loss
Distress sales of livestock (in response to indemnity payments)
Share of children working full-time, part-time, and studying fulltime
IBLI uptake in the past 12 months
Secondary Outcomes (explanation)
Herd management expenditure is an important indicator of pastoral investment of a household. To measure this, we calculate the total annual expenditure on water, fodder, supplementary feeding, and veterinary expenses.

We use milk income per livestock market-value equivalent as a measure of productivity of livestock herding. IBLI was found to increase milk income per livestock market-value equivalent in the short-term. We aggregate the income per each animal unit from the milk sales throughout four sales seasons. For comparability, US dollar is used as a currency.

Information on the number of animals lost due to various reasons (e.g., drought, diseases, livestock raid) was collected in the survey. We create a measure at the animal type, referring to the number of losses per animal type, as well as an aggregate measure by their market values using the pooled average prices observed from all purchases and all sold animals.

This variable is constructed by the number of animals sold to cope with droughts. We aggregate the number of animals across different types by their market values using the pooled average prices observed from all purchases and all sold animals.

Children play important role in a household’s livestock production. A previous study finds that IBLI increases children’s participation in full-time schooling while decreasing part-time work. Using information on children’s primary and secondary activities over the 12 month periods, we construct children’s activity status ranging from full-time work, part-time work and schooling, and full-time schooling.

IBLI uptake is recorded for all sample households in each type of animal – camels, cows, goats, and sheep. We examine both the extensive margin of whether or not the household purchased any IBLI policy, as well as the intensive margin corresponding to the number of animals insured of each type in Tropical Livestock Units (TLU)

Experimental Design

Experimental Design
The original research design distributed discount coupons for insurance premium randomly within each community (sublocation in Kenya, kebele in Ethiopia) each sales season. Details of this intervention are specified in Jensen, Barrett, and Mude (2017) for Kenya and Matsuda, Takahashi, and Ikegami (2019) for Ethiopia, respectively.

In addition to the discount coupons, interventions to transfer knowledge about the IBLI product were offered in both countries. In Kenya, a selected subsample of communities played IBLI knowledge games designed to illustrate key features of IBLI products. In Ethiopia, learning kits – including skit tapes and cartoons – were provided to randomly chosen subset of the communities. We do not explore the effect of these interventions in our analysis since the immediate effect of these interventions on insurance uptake were shown to be minimal (Jensen, Mude, and Barrett, 2018; Takahashi et al., 2016).
Experimental Design Details
Randomization Method
Stratified randomization done by computer.
Randomization Unit
Treatments were randomized among participants within sublocation in Kenya and within kebele in Ethiopia. Treatments were re-randomized each sales season.
Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters
16 sublocations in Kenya, 17 kebeles in Ethiopia
Sample size: planned number of observations
The original sample in Kenya contained 924 households. During rounds 2-6, attrited households were replaced when possible. Round 7, targeted the subsample of 954 households that had been surveyed at least twice during rounds 1-6 as its roster and managed to survey 871. In Ethiopia, the baseline sample was 515. During rounds 2-4, attrited households were replaced when possible. Round 5 targeted the subsample of 515 households that had been surveyed at baseline as its roster and managed to survey 398.
Sample size (or number of clusters) by treatment arms
Treatment status was rerandomized within sample cluster each sales season.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Institutional Review Boards (IRBs)

IRB Name
Institutional Review Board (Cornell University)
IRB Approval Date
IRB Approval Number
0907000655, 1203002881, 2008009760
IRB Name
International Livestock Research Institute Institutional Research Ethics Committee
IRB Approval Date
IRB Approval Number
LRI-IREC2015, ILRI-IREC2020-53
IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

Analysis Plan Documents


MD5: 0cb2cd77a4d6aea5640aba80b1bbd69e

SHA1: a3ad4150a21a8473d9cdc8f6880baa80727f4be5

Uploaded At: April 03, 2023


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