To What Extent Does Catastrophic Drought Insurance Promote Climate Resilience? Evidence from Index-Based Livestock Insurance (IBLI)

Last registered on June 17, 2026
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Pre-Trial

Trial Information

General Information

Title
To What Extent Does Catastrophic Drought Insurance Promote Climate Resilience? Evidence from Index-Based Livestock Insurance (IBLI)
RCT ID
AEARCTR-0018802
Initial registration date
June 10, 2026

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
June 17, 2026, 9:03 AM EDT

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

Locations

Country
Ethiopia
Region
Country
Kenya
Region

Primary Investigator

Name
Sophie Schenkel
Affiliation
Universiteit Utrecht
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Other Primary Investigator(s)

PI Name
Karlijn Morsink
PI Affiliation
Universiteit Utrecht
Contact Investigator
PI Name
Nathan Jensen
PI Affiliation
University of Edinburgh
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Additional Trial Information

Status
Completed
Start date
2009-01-01
End date
2022-02-28
Keywords
Agriculture, Finance & Microfinance, Welfare
Additional Keywords
Insurance, Risk
JEL code(s)
Secondary IDs
Prior work
This trial is based on or builds upon one or more prior RCTs.
Abstract
As global temperatures rise, Sub-Saharan Africa will experience increasingly frequent and severe droughts. Pastoralists, who depend almost entirely on livestock and rain-fed vegetation for their livelihoods, are among the most exposed to these climatic shifts. For these often-nomadic communities, worsening drought conditions threaten not only their primary income source but also their food security and long-term wellbeing. In response, Index Based Livestock Insurance (IBLI) was introduced as a commercial insurance product in 2009 to shield vulnerable households from aggregate climate risk. Using an IV strategy that exploits the randomized distribution of discount coupons, this paper examines the impact of IBLI on nine proxies of climate resilience across 1,619 pastoralist households in Kenya and Ethiopia. The central question is whether IBLI-induced investment in livestock-related activities comes at the expense of broader strategies that may be more robust under intensifying climate pressures.
External Link(s)

Registration Citation

Citation
Jensen, Nathan, Karlijn Morsink and Sophie Schenkel. 2026. "To What Extent Does Catastrophic Drought Insurance Promote Climate Resilience? Evidence from Index-Based Livestock Insurance (IBLI) ." AEA RCT Registry. June 17. https://doi.org/10.1257/rct.18802-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention (Hidden)
Introduced in Kenya in 2010, Index Based Livestock Insurance (IBLI) offers an innovative alternative to traditional indemnity insurance for pastoralists in developing countries. Sold during two annual windows, IBLI provides year-long coverage with payouts triggered by remotely sensed NDVI data. This study examines the effects of IBLI on nine proxies of climate resilience in pastoralist households.
Intervention Start Date
2010-10-01
Intervention End Date
2015-09-30

Primary Outcomes

Primary Outcomes (end points)
Herd diversification
Livestock mortality risk
Income diversification
Veterinary services (measures a and b)
Herd mobility
Youth educational enrollment
Herd management expenditures
Livestock selling
Primary Outcomes (explanation)
Herd diversification is measured using Simpson's Diversification Index where I take into account the share of species in the total herd, expressed in terms of Tropical Livestock Units (TLU).

Livestock mortality risk measures the herd mortality rate. I construct this measure by calculating the mortality rate of each species and summing the product of TLU per species by the mortality rate and then dividing by total household TLU. I include a cutoff point where herd survival rapidly declines, around 20 TLU. I calculate livestock mortality risk separately for TLU above and below 20, separately for wet and dry seasons, and separately for herded and owned livestock.

Income diversification is measured using Simpson's Diversification Index (SDI), a commonly used metric drawn from ecology that captures both the number of income sources and the evenness of their distribution. Building this index, I determine the concentration of any single income source.

Veterinary services refers to vaccinations and de-worming procedures used by pastoralist households to protect their herd. I define the veterinary services proxy in two ways, controlling for TLU. The first proxy looks at the share of livestock-related expenditures spent on veterinary services and the second proxy measures the veterinary service intensity where veterinary service expenditures are normalized to herd size denoted in TLU.

Herd mobility is measured using survey data capturing household migration patterns. I specifically define herd mobility as the share of total migrations in which livestock are moved to a regular satellite camp, which is considered productive migration — as opposed to an irregular satellite camp, which is considered risky migration.

Youth educational enrollment refers to human capital accumulation by pastoralist households. IBLI can affect whether households invest in their children's education. I define youth enrollment as the share of school-aged children within the household who currently attend school, accounting for country-specific age thresholds.

The herd management proxy captures livestock management intensity, defining it as the ratio of livestock-management expenditures relative to TLU.

Livestock selling is defined as the share of distress sales in total livestock sales, expressed in TLU. I classify a livestock sale as a distress-based sale if it occurs during the dry season and coincides with a livestock mortality rate of 15 percent or more. All other sales are classified as non-distress sales.

Secondary Outcomes

Secondary Outcomes (end points)
IBLI uptake
Secondary Outcomes (explanation)
IBLI uptake is the dependent variable in the first-stage regression. IBLI uptake is recorded for all sample households in Ethiopia and Kenya. I measure IBLI uptake using a binary variable which indicates whether households insured herd species (cattle, shoats, and camels).

Experimental Design

Experimental Design
The original research was piloted by the International Livestock Research Institute (ILRI) and evaluates the impact of IBLI on several household outcomes (e.g., herd size, cash income, production strategies, and human capital accumulation) by randomly assigning discount coupons and discount rates at the household-level.

The original study took place in Kenya and Ethiopia. The intervention was implemented in 2009 to 2015 in Marsabit district in Kenya with Takaful Insurance, and from 2012 to 2015 in Borena zone of Ethiopia with Oromia Insurance company. Details of how IBLI was implemented are specified in (Barrett et al., 2025; Jensen et al., 2017; Chantarat et al., 2013).
Experimental Design Details
Randomization Method
Stratified randomization done by computer.
Randomization Unit
Treatment was randomized among pastoralist households within sublocations in Kenya and kebeles in Ethiopia. Treatments were re-randomized each sales season which occured twice per year.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
16 sublocations in Kenya and 17 kebeles in Ethiopia.
Sample size: planned number of observations
The original sample in Kenya contained 1,060 households. Across rounds 1 through 6, household replacement was used to maintain a sample size of 924. When households were not available, they were replaced with randomly selected households from the community roster at baseline. The original sample in Ethiopia contained 559 households. New households were added to replace lost households. Across all rounds 1-7, 1,619 pastoralist households were surveyed.
Sample size (or number of clusters) by treatment arms
Treatment status was re-randomized within sample clusters each sales season.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Institutional Review Board (Cornell University)
IRB Approval Date
2021-10-10
IRB Approval Number
0907000655, 1203002881, 2008009760
IRB Name
International Livestock Research Institute Institutional Research Ethics Committee
IRB Approval Date
2021-02-05
IRB Approval Number
LRI-IREC2015, ILRI-IREC2020-53
IRB Name
NATIONAL COMMISSION FOR SCIENCE,TECHNOLOGY & INNOVATION
IRB Approval Date
2020-01-15
IRB Approval Number
NACOSTI/P/20/7050
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials