The Cost Effectiveness of Integrating Weather Index Agricultural Insurance into the Productive Safety Net program in Ethiopia

This NWO-WOTRO project investigates whether weather index insurance can be used to mitigate negative impacts of large rainfall shocks among rural households.

So when considering an expansion of existing safety net programs, should weather index insurance be included? How can it be cost-effectively integrated? Or should the government just give more cash to the poor? Which of these two alternatives will bring larger positive effects on consumption, investments and agricultural production? Which will be more effective in alleviating poverty? To obtain unbiased causal estimates that can properly answer these questions, this project uses a randomized controlled trial (RCT) on a sample of 30 rural villages and 900 rural households in Ethiopia.