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Marc F. Bellemare Posts

Published September 19, 2012

The Third Pillar of Microfinance: Insurance for the Poor in Developing Countries

Over the last few years, index insurance has been receiving an increasing amount of attention from researchers and policy makers.

Whereas regular insurance pays out when a verifiable loss is incurred (e.g., flood insurance pays out when there has been a flood), whether an index insurance pays out depends on whether some index crosses a certain threshold. So for example, a rainfall index insurance for the agricultural producers in a given region would pay out when growing conditions in that region are too dry, i.e., when rainfall falls below a specific, predetermined threshold.

The beauty of index insurance is that it greatly reduces the scope for moral hazard. Indeed, if I insure your crop, you might well decide to neglect your field, do nothing for the entire season, and wait for me to give you a payout. Not so with index insurance, since the index (e.g., rainfall, temperature, etc.) is typically very difficult to manipulate.

Continue readingThe Third Pillar of Microfinance: Insurance for the Poor in Developing Countries
Published September 18, 2012

LATE with Multiple Instrumental Variables

(If you are a new reader, this post is a bit more technical in nature and follows up on a three-part series published over the past few weeks. Click the following links for parts 1, 2, and 3.)

A colleague writes:

I have been enjoying your posts on the LATE. It got me thinking, as the number of instruments increases, does the LATE approach the ATE? Put another way, as the R2 of the instrumenting equation approaches 1, does the LATE converge to the ATE?

Continue readingLATE with Multiple Instrumental Variables

Published September 17, 2012

Welcome New Readers!

Many of you have paid their first visit to this blog in the last few days, after my post on the trading game went viral on Reddit last Wednesday and Greg Mankiw linked to it on Thursday. If this describes you, welcome to my blog, and thank you for coming back.

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I blog about development economics, agricultural development, food policy, economics, and empirical methods in the social sciences, with a few miscellaneous posts every once in a while.

I make absolutely no money from this website (no, not even when you buy a book on Amazon as a consequence of one of my links; that program is not legal in North Carolina), and I don’t ever intend to. I do this purely to contribute to current policy debates, contribute to my profession, interact with like-minded people, and become a better writer.

Oh, and I am always on the lookout for good topics. So if you’d like to see me write on a given topic, please email me.