Study to Establish Farmer Resilience Thresholds Linked to Climate Insurance Coverage

Last registered on September 12, 2024
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Pre-Trial

Trial Information

General Information

Title
Study to Establish Farmer Resilience Thresholds Linked to Climate Insurance Coverage
RCT ID
AEARCTR-0014309
Initial registration date
September 04, 2024

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
September 12, 2024, 5:40 PM EDT

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

Locations

Country
Malawi
Region
Zomba, Machinga, Mulanje districts

Primary Investigator

Name
Jonathan Bauchet
Affiliation
Purdue University
Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status
On going
Start date
2024-01-01
End date
2026-02-28
Keywords
Agriculture, Finance & Microfinance
Additional Keywords
crop insurance, smallholder farmer
JEL code(s)
D13, O13, O16
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Smallholder farmers in sub-Saharan Africa face many threats to producing staple crops like maize. One of the major challenges is dealing with risk from droughts, floods and pest attacks. Insurance products can help reduce farmers’ risk by providing them a financial benefit in the face of shocks. This in turn helps them build resilience that can make them better able to respond and survive current and future shocks. The objective of this study is to determine what amount of insurance coverage best increases smallholder farmers' resilience. Higher coverage is better but costs farmers (and/or organization subsidizing premiums) more. Specifically, we seek to answer two key questions in this project:
(1) Is there a threshold above which smallholder farmers in Malawi are resilient to common agricultural risks in their area? How can resilience be defined and measured?
(2) What level of maize insurance coverage do smallholder farmers need in order for them to meet the threshold of resilience to agricultural risks?
External Link(s)

Registration Citation

Citation
Bauchet, Jonathan. 2024. "Study to Establish Farmer Resilience Thresholds Linked to Climate Insurance Coverage." AEA RCT Registry. September 12. https://doi.org/10.1257/rct.14309-1.0
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
1 control and 2 treatment groups:
* T1: medium amount of insurance payout (loan forgiveness + up to MK122,000 depending on loss size)
* T2: large amount of insurance payout (loan forgiveness + up to MK245,000 depending on loss size)
* C: 'normal' amount of insurance payout -- i.e. same as previous done (loan forgiveness only)
Intervention Start Date
2024-06-01
Intervention End Date
2025-08-31

Primary Outcomes

Primary Outcomes (end points)
Farmer resilience -- measured using FAO's RCI.
Food insecurity and dietary diversity.
Asset and animal ownership and sales.
Savings and credit amounts.
Primary Outcomes (explanation)
The RCI's construction is widely described online (e.g. https://elearning.fao.org/course/view.php?id=747).

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Randomized controlled trial, in which areas of Malawi in which the partner works were randomly assigned to the control group or one of the two treatment groups described above. The analysis will take place at the farmer level. (Country area or "site" > farmer groups > farmers.) The randomization was stratified by agro-ecological zone (12 AEZs in the whole of Malawi).
Experimental Design Details
Not available
Randomization Method
In office with a computer (Stata code).
Randomization Unit
Site. A site is a geographic area including several farmer groups. It includes several villages. (Site < district)
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
24 sites
Sample size: planned number of observations
1440 farming households
Sample size (or number of clusters) by treatment arms
480 farming households in each group (C/T1/T2)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
0.28 SD for resilience index; 0.25 SD for sales of animals; 0.25 SD for food insecurity
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Purdue University Human Research Protection Program
IRB Approval Date
2023-06-30
IRB Approval Number
IRB-2023-408
IRB Name
Malawi University of Science and Technology Research Ethics Committee
IRB Approval Date
2023-06-15
IRB Approval Number
P.05/2023/048
Analysis Plan

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