Ambiguity and technology adoption under index insurance
Experimental evidence
Bibliographic Data
| ID | 11929431 |
|---|---|
| Authors | Jan Jozwik (University of Nottingham Ningbo China, corresponding author) |
| Year | 2025 |
| Volume | 141 |
| Pages | 102854-102854 |
| Publication date | 2025-12-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Food Policy (JOURNAL) |
| Journal identifiers | ISSN: 0306-9192 • E-ISSN: 1873-5657 |
| Publisher | Elsevier BV (PUBLISHER) |
| DOI | 10.1016/j.foodpol.2025.102854 |
| OpenAlex | W4417323633 |
| Language | EN |
| References cited | 70 |
Artefactual field experiment can precisely calibrate and vary ambiguous environment. • Ambiguity is an important factor limiting technology adoption under index insurance. • Technology take-up rates depend on the degree of ambiguity. This paper investigates the effect of ambiguity on technology adoption under index insurance. I conduct an artefactual field experiment with Ghanaian cocoa farmers. Experimental subjects had an option to invest in a package of fertilizer bundled with index insurance. The returns depended both on the subjects’ investment choices and on a stochastic weather realization. The key ingredient of the study was whether the exact probability of bad weather was known or not. This probability was ambiguous in the experimental treatments, and the degree of this ambiguity varied across treatments. A large negative effect on fertilizer investments was found in treatments with either small or large ambiguity. The effect of large ambiguity was also found to be significantly stronger, suggesting that technologies with which farmers are relatively more experienced are more likely to be adopted under index insurance schemes. I provide new evidence that ambiguity may be a significant factor limiting the effectiveness of index insurance in promoting agricultural innovation. The overall findings are complementary to related recent randomized controlled trials, since it is effectively impossible to precisely calibrate and vary the level of ambiguity using the latter methodology
Ambiguity · Ambiguity aversion · Field (mathematics · Field experiment · Index (typography · Investment (military · Limiting · Agricultural Innovations and Practices · Agricultural risk and resilience · Insurance and Financial Risk Management
Maxmin expected utility with non-unique prior
Field Experiments
Agricultural Decisions after Relaxing Credit and Risk Constraints
Learning about a New Technology
Resource Slack and Propensity to Discount Delayed Investments of Time Versus Money.
Technological Innovations, Downside Risk, and the Modernization of Agriculture
Nudging Farmers to Use Fertilizer
Attitudes Toward Risk
Impatience and Uncertainty
A Smooth Model of Decision Making under Ambiguity
Subjective Probability and Expected Utility without Additivity
Risk Aversion and Incentive Effects
Risk, Ambiguity, and the Savage Axioms
World Development Report 2015
Robust Inference With Multiway Clustering
Bootstrap-Based Improvements for Inference with Clustered Errors
Social networks, heterogeneity, and adoption of technologies
How basis risk and spatiotemporal adverse selection influence demand for index insurance
Smallholder productivity and weather shocks
Understanding farmers’ valuation of agricultural insurance
Landscape heterogeneity, basis risk and the feasibility of index insurance
Technology adoption and value chains in developing countries
Experimental Evidence on the Drivers of Index-Based Livestock Insurance Demand in Southern Ethiopia
Randomized interventions and “real” treatment effects
Consumption risk, technology adoption and poverty traps
Where and how index insurance can boost the adoption of improved agricultural technologies
Insurance, credit, and technology adoption
Do preference reversals generalise? Results on ambiguity and loss aversion
Risk preferences after a typhoon
Ambiguity aversion in the long run
Sadder but wiser
Getting Income Shares Right
| Highly cited | No |
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