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Using choice experiments, we estimate the willingness to pay for price insurance among cotton and paddy farmers in the Indian state of Gujarat. We also identify the interactions between the demand for price insurance and the existing informal and formal insurance mechanisms. Our results indicate that cotton farmers value price insurance more than paddy farmers. Also, most of the existing informal risk management strategies of farmers seem to have a positive effect on the demand for price insurance, suggesting potential complementarities. Important policy implications on the design and bundling of innovative financial products follow from our findings

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  • Thiagu Ranganathan
  • Sarthak Gaurav
  • Ashish Singh

    (Institute of Economic Growth, Delhi)

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  • Thiagu Ranganathan & Sarthak Gaurav & Ashish Singh, 2014. "Using choice experiments, we estimate the willingness to pay for price insurance among cotton and paddy farmers in the Indian state of Gujarat. We also identify the interactions between the demand for," IEG Working Papers 340, Institute of Economic Growth.
    • Handle: RePEc:awe:wpaper:340
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    More about this item

    Keywords

    Willingness to pay; price insurance; choice experiments; India;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing

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