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