This paper estimates how experimentally-manipulated experiences with a novel financial product, rainfall index insurance, affect subsequent insurance demand. Using a seven-year panel, we develop three main findings. First, recent experience matters for demand, consistent with overinference from small samples. Second, spillovers also matter, in the sense that the recent payout experience of village co-residents affects insurance demand about as much as one's own recent payout experience. Third, the spillover effect decays as time passes while the effect of one's own experience does not. We discuss implications of this analysis for commercial sustainability of this complicated but promising risk management technology.

Highlights Demand among smallholder farmers in Kenya for improved storage bags is elastic. Lowering the price of the bag by 20% leads to a 29% increase in profit. Prior awareness of the technology increases mean willingness to pay by 20%. Medium by which information is disseminated does not affect willingness to pay. Cheapest media option, text message, is most cost-effective.

ObjectivesIn this paper, we estimate the impact after 4–8 months of a large one-off unconditional cash transfer delivered to refugees during a time of dual shocks: the COVID-19 pandemic and cuts to monthly aid. We focus on four key outcomes: (1) health-seeking behaviour; (2) COVID-19 specific preventive health practices; (3) food security and (4) psychological well-being.MethodsWe use both quantitative and qualitative data to understand the impact of a cash transfer in this context. Quantitatively, we use a baseline survey of 1200 households (Q4 2019) and follow-up with three rounds of phone surveys in Q2 and Q3 2021, capturing at least half the sample in each round. We exploit an experimental variation in the timing of the cash transfer to assess the effect of the cash transfer through ordinary least squares regressions of intention to treat. Controlling for key baseline characteristics, we analyse the effect of the cash transfer on health access, COVID-19 health practices, food security and psychological well-being. Qualitatively, we make use of a longitudinal, small-n sample of refugee respondents, each of whom we interviewed up to 15 times between February and September 2020 to understand change over time and to go deeper into key topics.ResultsWe do not find a statistically significant effect (6.2%, p=0.188) of receiving the cash transfer on preventative measures against COVID-19. However, households receiving the cash transfer were more food secure, with a 14.4% (p=0.011) improvement on the food security index, have better psychological well-being (24.5%, p=0.003) and are more likely to seek healthcare in the private health facilities (10.4%, p=0.057) as compared with control households. We do not find significant results on the value of food consumption. Overall, we find stronger treatment effects for households that were the first to receive the cash transfers.ConclusionTaken together, we find significant support for the importance of cash transfers to refugee households mitigating against declines in food security and mental well-being in the face of shocks.

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.