The role of information on preferences and demand for bundled index-based livestock insurance

We will use a choice experiment to assess preferences for bundled index-based livestock insurance. The experiment will entail giving pastoralists in northern Kenya a discount coupon to spend on services or products pertaining to livestock production. The amount of the coupon will be varied randomly across the pastoralists. The experiment will also entail providing a training session to a random sub-sample of the communities. In the training session, we will provide information on the pros and cons of bundled products, and information on the condition of the vegetation in the area (proxy for pasture condition and availability, and availability of water).

2024-08-13

2024-09-15

1. Knowledge of bundling before and after the training. This will be a composite consisting of 6 questions with equal weights.
2. Pastoralists preference for bundled IBLI products (maximum willingness to pay).

Knowledge will be a composite index consisting of 6 questions with equal weights.

1. Whether or not pastoralists redeemed their coupons.
2. The type of product/service redeemed at the points of sale. This will represent actual demand for the bundled products/services.
3. The total expenditures on the bundled products/services.

The experiment will target 260 pastoral groups (130 men groups, and 130 women groups), each with approximately 8 members. We will have three levels of exogeneous variation in the experiment. The first level will entail randomly assigning pastoralists to either the information intervention group (n = 130) or the no information intervention group (n = 130). The second level will entail randomly assigning pastoralists in each of the two groups to a coupon amount of either Ksh. 1000 (n = 65) or Ksh. 2000 (n = 65). This will be done at the field to enhance transparency—the pastoralists will select a piece of paper from a bag to determine whether they receive the Ksh. 1000 coupon or the Ksh. 2000. Lastly pastoralists in each of the 4 groups will be assigned randomly to one of the four products, namely IBLI+animal health, IBLI+animal nutrition, IBLI+breeding, and IBLI+a flexible package.

Not available

Randomization will be done in the office by a computer.

Groups of men and women will be randomized into the information treatment. Exogeneous variation in coupon amount will be at individual level.

Yes

260 men and women groups.

2,080 pastoralists

130 men groups and 130 women groups. Each group comprises 8 individuals.

Assuming an inter-cluster correlation of 0.2, an effect size of 0.2, and 8 pastoralists in each cluster, gives us a power of 0.903 (after 1000 simulations). At the second level of randomizations, holding the same assumptions with 125 clusters, we obtain a power of 0.6. However, important to note is that the power estimates are conservative—every pastoralist will evaluate all the 4 bundles meaning that the number of observations will increase by a factor of 4.