The following comes from a recent paper by Dercon et al (JDE 2014). In their paper,...

  

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The following comes from a recent paper by Dercon et al (JDE 2014). In their paper, they argue that in some cases index (rainfall) insurance is complementary to informal insurance. This means that the demand for rainfall insurance should be higher in groups that share risk. To test the hypothesis, the researchers offered the insurance to Iddirs, a type of self-insurance group common in rural Ethiopia. (Iddirs provide coverage from idiosyncratic shocks). "Training A" Iddirs received a standard training module, focused on the insured person alone. "Training B" Iddirs received the standard training module, plus one that explained why index insurance would work well within the Iddir. The question they try to answer is whether index insurance becomes more appealing (i.e., more people buy it) if people understand how valuable it can be within the Iddir. Consider table 4. In your discussion, ignore the variable "Number allocated to training". a. Column 1 and 2 are regressions where the unit of observation is (circle the correct): (5pts) a. The Iddir group b. The individual Iddir member. b. Consider column 2. What is the dependent variable, and how it is measured? What is "Training B", and how is it measured? What is the value of the coefficient on "Training B" in column 2, and is it statistically significant? What is the interpretation of this coefficient? Be precise! (5pts) c. Consider column 3. What is the dependent variable, and how it is measured? What is "Training B", and how is it measured? What is the value of the coefficient on "Training B" in column 2, and is it statistically significant? What is the interpretation of this coefficient? Be precise! (5pts) Table 4 Estimates of the impact of treatment on insurance demand (ITT and IV). Intent to treat (TTT) Training B Number allocated to training Constant Basic characteristics District fixed effects Observations R-squared Average demand in group 0.154 (0.069) 0.020** (0.008) 0.073 (0.059) No No 70 0.134 (2) Anyone in group purchased 0294" (0.133) 0.021 (0.016) 0.329*** (0.113) No No 70 0.100 (3) Individual purchased 0.113 (0.062) 0.013 (0.007) Q113 (0.0-49) No No 290 0.027 Individual purchased 0.133** (0.054) 0.014 (0.008) 0.119 (0.123) Yes Yes 288 0,126 The following comes from a recent paper by Dercon et al (JDE 2014). In their paper, they argue that in some cases index (rainfall) insurance is complementary to informal insurance. This means that the demand for rainfall insurance should be higher in groups that share risk. To test the hypothesis, the researchers offered the insurance to Iddirs, a type of self-insurance group common in rural Ethiopia. (Iddirs provide coverage from idiosyncratic shocks). "Training A" Iddirs received a standard training module, focused on the insured person alone. "Training B" Iddirs received the standard training module, plus one that explained why index insurance would work well within the Iddir. The question they try to answer is whether index insurance becomes more appealing (i.e., more people buy it) if people understand how valuable it can be within the Iddir. Consider table 4. In your discussion, ignore the variable "Number allocated to training". a. Column 1 and 2 are regressions where the unit of observation is (circle the correct): (5pts) a. The Iddir group b. The individual Iddir member. b. Consider column 2. What is the dependent variable, and how it is measured? What is "Training B", and how is it measured? What is the value of the coefficient on "Training B" in column 2, and is it statistically significant? What is the interpretation of this coefficient? Be precise! (5pts) c. Consider column 3. What is the dependent variable, and how it is measured? What is "Training B", and how is it measured? What is the value of the coefficient on "Training B" in column 2, and is it statistically significant? What is the interpretation of this coefficient? Be precise! (5pts) Table 4 Estimates of the impact of treatment on insurance demand (ITT and IV). Intent to treat (TTT) Training B Number allocated to training Constant Basic characteristics District fixed effects Observations R-squared Average demand in group 0.154 (0.069) 0.020** (0.008) 0.073 (0.059) No No 70 0.134 (2) Anyone in group purchased 0294" (0.133) 0.021 (0.016) 0.329*** (0.113) No No 70 0.100 (3) Individual purchased 0.113 (0.062) 0.013 (0.007) Q113 (0.0-49) No No 290 0.027 Individual purchased 0.133** (0.054) 0.014 (0.008) 0.119 (0.123) Yes Yes 288 0,126

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a The Lagrangian function for the firm is given by L q rk CI 8k1 I 1 6ke Where q is output k is capi... View the full answer