Promoting crop insurance adoption via Village Savings and Loan Associations in Vietnam

Last registered on October 12, 2021
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Pre-Trial

Trial Information

General Information

Title
Promoting crop insurance adoption via Village Savings and Loan Associations in Vietnam
RCT ID
AEARCTR-0008356
Initial registration date
October 10, 2021
Last updated
October 12, 2021, 2:35 PM EDT

Locations

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Primary Investigator

Name
THU VU
Affiliation
HIROSHIMA UNIVERSITY-idec
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Other Primary Investigator(s)

Additional Trial Information

Status
In development
Start date
2021-10-11
End date
2023-03-31
Keywords
Agriculture, Behavior
Additional Keywords
crop insurance, timing of premium payment
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Although crop insurance is an important risk management strategy for farmers to secure their income stability, the adoption of crop insurance has been extremely low. Recent studies have highlighted the significant role of pay-at-harvest premiums in take-up rate for crop insurance. However, pay-at-harvest faces a major challenge of default. To address such issue, this research focuses on a key scientific question: “What is the best timing of premium payments to boost farmers’ demand for crop insurance and mitigate payment default?”. To answer this question, this research evaluates and compares the causal impacts of different timings of premium payments on farmers’ take-up of crop insurance (rice insurance) and payment default using a field experiment in Vietnam. The field experiment is carried out in 41 Village Savings and Loan Associations (VSLAs) over two rice seasons to examine the persistent impacts of the interventions. The combination of delayed premium payments through VSLAs raises the social cost of default and reduces transaction cost as premiums are collected via VSLAs.
External Link(s)

Registration Citation

Citation
VU, THU. 2021. "Promoting crop insurance adoption via Village Savings and Loan Associations in Vietnam." AEA RCT Registry. October 12. https://doi.org/10.1257/rct.8356-1.0
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Experimental Details

Interventions

Intervention(s)
a. Pay-up-front (control): Farmers are requested to pay premiums when they decide to purchase crop insurance at the beginning of the season.
b. Pay-at-harvest (treatment 1): Farmers are allowed to pay premiums (plus 1% interest per month) at the end of the season although they decide to purchase crop insurance at the beginning of the season. The added interest rate is based on VSLAs’ borrowing interest rate.

Intervention Start Date
2021-11-01
Intervention End Date
2021-12-31

Primary Outcomes

Primary Outcomes (end points)
take-up decision, default decision, agricultural investments, farmers’ income and expenditure
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
This research includes 5 stages. In the 1st stage, a pilot and baseline survey are conducted to collect basic information of 41 VSLAs and 800 farmers. This information is used to assign 41 VSLAs into different treatment arms using stratified randomization technique. Then, VSLAs’ leaders are trained in the 2nd stage to be able to make lists of participants, collect premiums, and distribute insurance contracts.
My field experiment is carried out over two seasons (3rd stage, 4th stage, and 5th stage) to examine the persistent impacts of the treatments. In each season, insurance educators introduce crop insurance to farmers through VSLAs’ meetings at the beginning of the season. After that, farmers have 2 weeks to purchase the insurance. Farmers in pay-up-front group (control group) pay premiums within these two weeks. Farmers in delayed-payment groups pay premium (plus interest) at the end of the season or other delayed timings, respectively. Follow-up survey is conducted at the end of each season to obtain four outcomes: take-up decision, default decision, agricultural investments, farmers’ income and expenditure.
Experimental Design Details
Not available
Randomization Method
randomization done in office by a computer
Randomization Unit
Village Savings and Loan Association
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
41
Sample size: planned number of observations
800 households
Sample size (or number of clusters) by treatment arms
control group: 13 VSLAs
treatment groups: 28 VSLAs
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan