Social Networks and the Decision to Insure: Evidence from Randomized Experiments in China

Description: 

Using data from a two-year randomised experiment in rural China, this paper studies the influence of social networks on the decision to adopt a new weather insurance product and the mechanisms through which social networks operate. One year later, social networks continue to affect insurance demand: observing an above-median share of friends receiving payouts increases insurance take-up at a rate equivalent to about 50% of the impact of receiving payouts directly. The paper also finds that social network effects are larger in villages where households are more strongly connected, and when the people who receive financial education first are more central in the social network.

Topic: 

Region: 

Country: 

Year: 

Author: 

Jing Cai

Publisher: 

World Bank Blogs

Number of pages: 

1

Rating: 

No votes yet