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Insuring Kenyan Smallholder Farmers Against Drought: Does Livestock Index-Based Insurance Increase Climate Resilience?

Kauffmann - de Vries, Lea LU (2018) EKHS42 20181
Department of Economic History
Abstract
While index insurance has received increased attention as an instrument for adaptation to climate change, evidence supporting its effectiveness remains limited. This thesis explores the potential of normalized difference vegetation index (NDVI) based livestock index insurance in Northern Kenya to help small-scale farmers to manage climate change risks in the event of livestock-reducing drought. This research uses the corresponding longitudinal data for 924 households over six rounds between 2009 and 2015. The conducted analysis seeks to identify (1) which household characteristics influence the IBLI product take-up and (2) whether a households’ insurance status affects its income and consumption levels in the case of livestock loss from... (More)
While index insurance has received increased attention as an instrument for adaptation to climate change, evidence supporting its effectiveness remains limited. This thesis explores the potential of normalized difference vegetation index (NDVI) based livestock index insurance in Northern Kenya to help small-scale farmers to manage climate change risks in the event of livestock-reducing drought. This research uses the corresponding longitudinal data for 924 households over six rounds between 2009 and 2015. The conducted analysis seeks to identify (1) which household characteristics influence the IBLI product take-up and (2) whether a households’ insurance status affects its income and consumption levels in the case of livestock loss from drought. Results indicate that subsidies and daily mobile phone access influence IBLI product take-up. We find little evidence supporting the value of IBLI as a useful tool to manage climate change risks from its measured impact on income and consumption. Overall, findings show that index insurance as a relatively new climate management tool faces considerable start-up challenges, to which new digitalization and funding techniques could provide solutions. (Less)
Please use this url to cite or link to this publication:
author
Kauffmann - de Vries, Lea LU
supervisor
organization
course
EKHS42 20181
year
type
H2 - Master's Degree (Two Years)
subject
keywords
index insurance, microinsurance, livestock insurance, climate risk management, NDVI
language
English
id
8951998
date added to LUP
2018-08-20 14:46:59
date last changed
2018-08-20 14:46:59
@misc{8951998,
  abstract     = {{While index insurance has received increased attention as an instrument for adaptation to climate change, evidence supporting its effectiveness remains limited. This thesis explores the potential of normalized difference vegetation index (NDVI) based livestock index insurance in Northern Kenya to help small-scale farmers to manage climate change risks in the event of livestock-reducing drought. This research uses the corresponding longitudinal data for 924 households over six rounds between 2009 and 2015. The conducted analysis seeks to identify (1) which household characteristics influence the IBLI product take-up and (2) whether a households’ insurance status affects its income and consumption levels in the case of livestock loss from drought. Results indicate that subsidies and daily mobile phone access influence IBLI product take-up. We find little evidence supporting the value of IBLI as a useful tool to manage climate change risks from its measured impact on income and consumption. Overall, findings show that index insurance as a relatively new climate management tool faces considerable start-up challenges, to which new digitalization and funding techniques could provide solutions.}},
  author       = {{Kauffmann - de Vries, Lea}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Insuring Kenyan Smallholder Farmers Against Drought: Does Livestock Index-Based Insurance Increase Climate Resilience?}},
  year         = {{2018}},
}