T. Sakurai et T. Reardon, POTENTIAL DEMAND FOR DROUGHT INSURANCE IN BURKINA-FASO AND ITS DETERMINANTS, American journal of agricultural economics, 79(4), 1997, pp. 1193-1207
The objectives of this paper are twofold: (a) to estimate demand for f
ormal drought insurance using farm household data in Burkina Faso and
(b) to find what determines insurance demand. The following findings a
re salient. First, effective demand is found in all zones, which impli
es inadequacies in households' current self-insurance strategies. Seco
nd, there is much heterogeneity in the strategies to self-insure even
within zones. Third, the expectation of public food aid decreases dema
nd for drought insurance, which suggests that food aid is causing mora
l hazard. Fourth, households with large livestock holdings can reduce
the size of herd by substituting drought insurance for livestock holdi
ngs.