Title: Does Index-based livestock insurance change the cash saving behaviour of pastoralists in southern Ethiopia?
Abstract:
Because of climate change, agriculture in developing countries has become a riskier business. When weather shocks strike, in the absence of formal agricultural insurance markets, farmers often tap into their precautionary savings which is the quickest form of ex-post self-insurance to buffer consumption and/or restock herds. However, it may not be enough to cope with systematic shocks. Recently, index-based livestock insurance is getting a growing attention to deal with systematic agricultural risks. In this paper, we employ descriptive and multiple regressions to estimate the causal effects of index-based livestock insurance on saving behaviour of the Borena pastoralists which is less studied and has remained unclear yet, using three round household level paned data. Our estimations result show that cash saving behaviour of the pastural households is significantly and positively influenced by the insurance uptake. This finding suggests that the insurance can increase the likelihood of cash saving as it can enable insured households to offtake their herds at speculated market price. Likewise, since the insured have risk-averting behaviour and the insurance does not provide coverage against losses due to idiosyncratic risks, they may tend to save precautionary cash.
Biography:
Dr.Tnsue has completed his PhD 34 years from Chinese Academy of Agricultural Sciences, Institute of Agricultural Economics, and Development (IAED) Doctoral Degree (PHD) in Industrial Economics, Beijing, China. He is now a consultant, lecturer and researcher at Ethiopian Civil Service, Etiopia. , He has published more than 9 papers in reputed journals.
