Social Networks and the Decision to Insure in China

Last registered on November 06, 2016
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Pre-Trial

Trial Information

General Information

Title
Social Networks and the Decision to Insure in China
RCT ID
AEARCTR-0001747
Initial registration date
November 06, 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
November 06, 2016, 10:43 AM EST

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

Locations

Country
China
Region
Asia

Primary Investigator

Name
Jing Cai
Affiliation
University of Michigan
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Alain Janvry
PI Affiliation
University of California, Berkeley
Contact Investigator
PI Name
Elisabeth Sadoulet
PI Affiliation
University of California, Berkeley
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2010-01-01
End date
2013-12-31
Keywords
Environment & Energy, Finance & Microfinance, Welfare
Additional Keywords
Social networks, Weather insurance, Network effects, Information, Insurance
JEL code(s)
G22, O12, O16, P36, Q12, Q54, Z13
Secondary IDs
Abstract
Using data from a randomized experiment in rural China, we study the influence of social networks on weather insurance adoption and the mechanisms through which they operate. To quantify network effects, the experiment provides intensive information sessions about the product to a random subset of farmers. For untreated farmers, the effect of having an additional treated friend on take-up is equivalent to granting a 13 percent reduction in the insurance premium. By varying the information available about peers' decisions and randomizing default options, we show that the network effect is driven by the diffusion of insurance knowledge rather than purchase decisions.
External Link(s)
J-PAL Evaluation Summary

Registration Citation

Citation
Cai, Jing, Alain Janvry and Elisabeth Sadoulet. 2016. "Social Networks and the Decision to Insure in China." AEA RCT Registry. November 06. https://doi.org/10.1257/rct.1747-1.0
Former Citation
Cai, Jing, Alain Janvry and Elisabeth Sadoulet. 2016. "Social Networks and the Decision to Insure in China." AEA RCT Registry. November 06. https://www.socialscienceregistry.org/trials/1747/history/11663
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
The intervention was an informational session about weather insurance. The intervention included different specifications implemented at the village level (price and default variation) and within the village level through rounds (time and information variation).

Village I: All households face the same price for insurance.
Village II: Households face 1 of 7 different price options for purchasing insurance.

Within Village I:
Village I - Buy default: Households must opt-out of purchasing insurance.
Village I - No buy default: Households must opt-in to purchasing insurance.

At the village level, for both Villages I and II, information sessions took place in two rounds with two types of sessions being offered simultaneously in each round. In the second round of informational sessions, three types of further information were offered.

Round 1:
Simple1: A 20 minute informational session with information provided solely on the insurance contract. This was followed by the option to take-up insurance.
Intensive1: A 45 minute informational session with information provided on the insurance contract, along with an explanation on how insurance works and its benefits. This was followed by the option to take-up insurance.

Round 2 sessions were the same as Round 1 sessions, with a variety of additional information included.
Simple2/Intensive2 - No Info: No additional information was offered.
Simple2/Intensive2 - Overall: Participants were told how many participants had attended the first round of sessions, and how many households had taken up the insurance. They were then offered the option to take-up the insurance.
Simple2/Intensive2 - Individual: Participants were provided with a nominal list of all individuals who had taken up the insurance in the first round. They were then offered the option to take-up the insurance.
Intervention Start Date
2010-01-01
Intervention End Date
2010-12-31

Primary Outcomes

Primary Outcomes (end points)
Information spillovers, Insurance take-up, Knowledge about insurance, Knowledge of others' purchase decisions
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We designed a randomized experiment based on the introduction of a new weather insurance policy for rice farmers offered by the People's Insurance Company of China (PICC), China’s largest insurance provider. Our experimental design allows us to not only identify the causal effect of social networks on product adoption, but also test for the role of various channels through which social networks operate. Furthermore, using a household level price randomization, we calculate the price equivalence of the social network effect on insurance take-up. Finally, taking advantage of the substantial variation in network structure across households, we measure the effect of network characteristics on the strength of social network effects.
Experimental Design Details
Randomization Method
STATA
Randomization Unit
Village
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
185 villages
Sample size: planned number of observations
5,335 households
Sample size (or number of clusters) by treatment arms
Village I - Buy default: 85 villages
Village I - No buy default: 88 villages
Village II: 12 villages

Simple1: 1,079 households
Intensive1: 1,096 households
Simple2 - No Info: 657 households
Intensive2 - No Info: 660 households
Simple2 - Overall: 355 households
Intensive2 - Overall: 350 households
Simple2 - Individual: 362 households
Intensive2 - Individual: 343 households
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Study has received IRB approval. Details not available.
IRB Approval Date
Details not available
IRB Approval Number
Details not available
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Yes
Data Collection Completion Date
Final Sample Size: Number of Clusters (Unit of Randomization)
185 villages
Was attrition correlated with treatment status?
Final Sample Size: Total Number of Observations
All rice producing households in each village were invited to attend one of the information sessions, and about 90% did attend (5,335 households).
Final Sample Size (or Number of Clusters) by Treatment Arms
Data Publication

Data Publication

Is public data available?
Yes
Public Data URL
https://www.aeaweb.org/articles?id=10.1257/app.20130442

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
Social Networks and the Decision to Insure
Citation
Cai, Jing, Alain De Janvry and Elisabeth Sadoulet. 2015. "Social Networks and the Decision to Insure." American Economic Journal: Applied Economics, 7(2): 81-108.
URL
https://www.aeaweb.org/articles?id=10.1257/app.20130442

Reports & Other Materials