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The Impact of Personal Experiences on Insurance Take-Up in China

Last registered on October 17, 2016

Pre-Trial

Trial Information

General Information

Title
The Impact of Personal Experiences on Insurance Take-Up in China
RCT ID
AEARCTR-0001467
Initial registration date
October 17, 2016

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
October 17, 2016, 2:27 PM EDT

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

Locations

Region

Primary Investigator

Affiliation
University of Michigan

Other Primary Investigator(s)

PI Affiliation
National University of Singapore

Additional Trial Information

Status
Completed
Start date
2009-06-01
End date
2010-05-31
Secondary IDs
Abstract
This study examines the effect of experience and knowledge on weather insurance adoption. First, we conduct insurance games with farmers, and find that the treatment improves real insurance take-up by 46%. The effect is not driven by changes in risk attitudes and perceived probability of disasters, or by learning of insurance benefits, but is driven by the experience acquired in the game. Second, we find that providing information on the disaster probability has a strong positive effect on insurance take-up. Finally, when subjects receive both treatments, the probability information has a greater impact on take-up than does the disaster experience.
External Link(s)

Registration Citation

Citation
Cai, Jing and Changcheng Song. 2016. "The Impact of Personal Experiences on Insurance Take-Up in China." AEA RCT Registry. October 17. https://doi.org/10.1257/rct.1467-1.0
Former Citation
Cai, Jing and Changcheng Song. 2016. "The Impact of Personal Experiences on Insurance Take-Up in China." AEA RCT Registry. October 17. https://www.socialscienceregistry.org/trials/1467/history/11239
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2009-06-01
Intervention End Date
2010-05-31

Primary Outcomes

Primary Outcomes (end points)
(dependent variables below each outcome)


The Effect of Game Treatment on Insurance Takeup

- Individual Adoption of Insurance


The Heterogeneity of the Game Effect on Insurance Take-up

- Individual Adoption of Insurance


The Decomposition of the Game Effect: Changes in Risk Aversion and Perceived Probability of Future Disasters

- Individual Adoption of Insurance

- Risk Aversion

- Perceived Probability of Future Disaster


The Effect of Game Treatment on Insurance Knowledge

- Insurance Benefit Question 1

- Insurance Benefit Question 2


The Effect of the Number of Hypothetical Disasters on Real Insurance Take-up

- Individual Adoption of Insurance


The Effect of the Number of Hypothetical Disasters on Perceived Probability of Future Disasters

- Perceived Probability of Future Disasters


The Effect of Probability Treatment on Insurance Take-up

- Individual Adoption of Insurance

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
In order to study the role of disaster experience and knowledge on individual insurance take-up decisions, a randomized evaluation was conducted alongside the introduction of a new weather insurance policy for rice farmers in China by the People's Insurance Company of China. The experiment included two interventions. The first intervention sought to test how hypothetical experience affects insurance demand. Participants were provided with a hypothetical experience regarding weather shocks and insurance benefits by playing an insurance game. During the game, household heads were asked whether he/she would like to buy rice insurance in a hypothetical future year. Participants then played a lottery to determine if they experience a weather-related disaster in that year. After the lottery, participants were asked to calculate their hypothetical income for the year based on the insurance decision. Next, one or three days after the game intervention, each participant was visited and asked whether he/she would like to purchase weather insurance.

(see paper at end of registry entry for additional detail)
Experimental Design Details
Randomization Method
The experiment has a 4 by 2 design.
The first level of randomization consists of four groups that differ in how the insurance
contract is explained to farmers. The second level of randomization consists of two groups
that differ in whether we explicitly inform them about the true disaster probability.

(see figure 2 in paper for graphical representation)
Randomization Unit
individuals
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
Standard errors are clustered by
16 natural villages.
Sample size: planned number of observations
885 households
Sample size (or number of clusters) by treatment arms
Control: 259

- Probability: 24

- No Probability: 235

Calculation: 197

- Probability: 37

- No Probability: 160

Game 20%: 278

- Probability: 28

- No Probability: 250

Game 10%: 151

- Probability: 72

- No Probability: 79
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
May 31, 2010, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
May 31, 2010, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
(same as planned)
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
(same as planned)
Final Sample Size (or Number of Clusters) by Treatment Arms
(same as planned)
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
This study examines the effect of experience and knowledge on weather insurance adoption.
First, we conduct insurance games with farmers, and find that the treatment improves real insurance
take-up by 46%. The effect is not driven by changes in risk attitudes and perceived probability of
disasters, or by learning of insurance benefits, but is driven by the experience acquired in the game.
Second, we find that providing information on the disaster probability has a strong positive effect
on insurance take-up. Finally, when subjects receive both treatments, the probability information
has a greater impact on take-up than does the disaster experience.
Citation
Cai, Jing and Changcheng Song. "Do Disaster Experience and Knowledge Affect Insurance Take-up Decisions?" Working Paper, September 2015.

Reports & Other Materials