Take-down policy If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim.
Take-down policy If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim.
Index‐based insurance offers a climate risk management strategy that can benefit the poor. This article focuses on whether adopting index insurance improves access to financial markets and reduces credit rationing, using empirical analyses focused on Ethiopia. With different identification strategies, including a newly developed method that leverages the varying availability of index insurance across areas, the authors control for potential selection biases by forecasting potential insurance adopters; they apply a cross‐sectional double‐difference method. Credit rationing can take the form of either supply‐side quantity rationing, in which case potential borrowers who need credit are involuntarily excluded from the credit market, or demand‐side rationing, such that borrowers self‐select and voluntarily withdraw to avoid transaction costs and threats to their collateral. By differentiating supply‐side and demand‐side forms and employing a direct elicitation method to determine credit rationing status, this study reveals that 38% of sample households are credit constrained. The preferred estimation techniques suggest that index insurance significantly reduces supply‐side rationing.
The search for effective mechanisms in technology adoption is high on the agenda of researchers and policy makers. In Ethiopia, adoption of technologies followed the diffusion of innovation information through public extension agents, cooperatives and their unions. The use of statutory channels evidenced to largely limit the innovation diffusion and the timely reach of technologies to the end user farmers for adoption due to their operational inefficiencies and bureaucracies emanating from statutory rules and regulations. This raises concerns how innovative ways of intermediating such technologies can be developed in a way that users trust and make informed decisions about the adoption of technologies. Thus, this study explains the roles of Afoosha social networks for technology uptake. Afoosha social network functions on the basis of orders in the predominant social capital, trustworthiness, altruism and with no self-centeredness. The existence of Afoosha social networks in the rural villages of Ethiopia would provide complementary pathways for effective diffusion of innovation and adoption of technologies. This study, therefore, generates a shred of evidence for the innovative mode of diffusing innovation concepts and adopting technologies that help to design policies that integrate the customary and statutory approaches for better technology adoption.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.