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Does Insurance Improve Resilience? Research: Jennifer Denno Cissé Presented by: Joanna Upton Academic Workshop on Mobile Pastoralism, Index Insurance,

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Presentation on theme: "Does Insurance Improve Resilience? Research: Jennifer Denno Cissé Presented by: Joanna Upton Academic Workshop on Mobile Pastoralism, Index Insurance,"— Presentation transcript:

1 Does Insurance Improve Resilience? Research: Jennifer Denno Cissé Presented by: Joanna Upton Academic Workshop on Mobile Pastoralism, Index Insurance, Computational Sustainability and Policy Innovations for the ASALs of East Africa June 10, 2015

2 Outline Background on Development Resilience Data Insurance and Household Resilience Insurance and Aggregate Resilience Conclusion Intro/BackgroundDataIdentificationAggregationConclusion Introduction

3 Barrett & Constas (2014) Proposes a theoretical framework for “development resilience” Implications for measurement: Recommends a moments-based, probabilistic approach Intro/BackgroundDataIdentificationAggregationConclusion Development Resilience

4 Cissé & Barrett (in production) Empirical implementation of B&C theory of development resilience Builds on poverty measurement, poverty dynamics, poverty traps, and vulnerability literatures Resilient = a high probability of maintaining acceptable level of well- being Intro/BackgroundDataIdentificationAggregationConclusion Development Resilience

5 Insurance & Resilience Use a development resilience approach to evaluate impact of IBLI on well-being Explore household-level impacts of insurance Construct aggregable FGT-type measure to explore resilience by subgroup Intro/BackgroundDataIdentificationAggregationConclusion Contribution

6 Data Intro/BackgroundDataIdentificationAggregationConclusion IBLI 5 rounds of panel data (Marsabit) 800+ households HH demographics, livestock accounting, income, consumption 2011 drought (before R3)

7 Data Intro/BackgroundDataIdentificationAggregationConclusion Constructed Variable Shock (drought dummy) = 1 if predicted livestock mortality > 15% Instrumental Variables Insurance Coupon Coupon * Predicted Livestock

8 Data Intro/BackgroundDataIdentificationAggregationConclusion Outcome Variables Mid-Upper Arm Circumference (MUAC) in cm Tropical Livestock Units (TLU): 1 TLU = 1 cow, 0.7 camel, 10 sheep, or 10 goats

9 Data Intro/BackgroundDataIdentificationAggregationConclusion Table 1: Summary Statistics Mean Fully Settled Partially Nomadic MUAC14.414.614.314.7 TLU13.25.915.221.7 Drought0.25 Female (Head)0.380.350.390.10 Age (Head)49.151.648.252.3 Educ (Head)1.02.30.60 Dependency1.021.041.011.17 N3278767 (23%)2431 (74%)80 (2%) Rounds4444

10 Impact of Insurance DataIdentificationAggregationConclusionIntro/Background

11 Impact of Insurance DataIdentificationAggregationConclusionIntro/Background

12 DataIdentificationAggregationConclusionIntro/Background Impact of Insurance Table 2: Pooled 2SLS Estimates of Well-being (A)(B)(D)(E) VARIABLESTLUV(TLU)MUACV(MUAC) W_lag0.970***10.19***-6.227**-0.936 W_lag2-0.00383**-0.07280.444**0.00559 W_lag37.04e-060.000786***-0.00981**0.00138 Shock-5.613***-1.664e-30-0.192*-0.477** Insured TLU0.4241.026e-290.202*-0.184 Shock*Insrd2.429-5.250e-30-0.06160.599** Path dynamics of well-being.Negative Impact of Shocks. No impact of insurance or interaction on TLU well-being. Slight impact on MUAC well-being. Mixed impacts on variance. Appears to be some heteroskedasticity.

13 DataIdentificationAggregationConclusionIntro/Background Identification Example from Cissé & Barrett Normal pdfs of TLU well-being for 2 HHs over time

14 Impact of Insurance DataIdentificationAggregationConclusionIntro/Background

15 DataIdentificationAggregationConclusionIntro/Background Identification Table 2: Pooled 2SLS Estimates of Well-being (C)(F) VARIABLESTLU ResilienceMUAC Resilience W_lag0.0285***-2.070*** W_lag2-0.00026***0.145*** W_lag35.06e-07***-0.00323*** Shock-0.173***-0.109*** Insured TLU0.0212*0.0795*** Shock*Insured0.0545*-0.00455 Strong path dynamics with resilience. Negative impact of shock on resilience.Combining mean & variance allows us to see positive impact of insurance on resilience, even in non-shock years. Having insurance during a drought years further increase TLU resilience (not significant for MUAC).

16 Aggregation DataIdentificationAggregationConclusionIntro/Background

17 DataIdentificationAggregationConclusionIntro/Background Aggregation

18 DataIdentificationAggregationConclusionIntro/Background Aggregation

19 Conclusion Current Work Resilience Measurement (Cisse & Barrett) Food Security Measurement using a Development Resilience Approach Future Directions Dynamic Optimization, Complex Socioecological Systems DataIdentificationAggregationConclusionIntro/Background

20 Author: Jenn Cissé jdc358@cornell.edu Presenter:Joanna Upton jbu3@cornell.edu


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