Author: Lena Giesbert / Publishing Institution: German Institute of Global and Area Studies / Political Geography: Africa

Author:: Lena Giesbert
Publication Date:: 12-2012
Content Type:: Working Paper
Institution:: German Institute of Global and Area Studies
Abstract:: This paper analyzes the determinants of households' decisions to purchase micro life insurance, the most common but least investigated type of microinsurance. It uses household survey data collected in southern Ghana in 2009. Insurance participation and extent of coverage are examined against a standard benchmark model, which argues that life insurance uptake increases with risk aversion, the probability of risk, initial wealth, and the “intensity for bequests.” Many of these predictions indeed hold in the case of micro life insurance. However, the results of probit and tobit models show that nonstandard factors also explain the participation decision. Unlike the case with other available types of insurance, there is a significant negative association between households' subjective idiosyncratic risk perception and the uptake of micro life insurance. Additionally, households' micro life insurance participation is strongly related to their relationships with formal financial services providers and their membership in social networks. These findings suggest that poorer households view microinsurance as a risky option.
Topic:: Health, Poverty, and Health Care Policy
Political Geography:: Africa and Ghana

Author:: Lena Giesbert and Susan Steiner
Publication Date:: 12-2011
Content Type:: Working Paper
Institution:: German Institute of Global and Area Studies
Abstract:: This article investigates the understandings and perceptions of (micro)insurance among low income people in southern Ghana, using evidence from four focus group discussions. It analyzes how the focus group participants think about various types of insurance – among them a micro life insurance product – and how their negative and/or positive evaluations have come about. The evidence indicates that (micro)insurance is mostly positively perceived by the participants of the focus group discussions. However, it is also found that many people's image of insurance is based on incomplete (and sometimes erroneous) information, or even on intuition. In addition, the experiences or opinions of peers turn out to be critical in shaping an individual's perception of insurance. These two factors potentially have a contagious effect, which can lead to unreasonably positive or overly negative ideas about (micro )insurance. Such ideas, in turn, can become detrimental to the further distribution of microinsurance.
Topic:: Health, Political Economy, and Poverty
Political Geography:: Africa and Ghana

Author:: Lena Giesbert and Kati Schindler
Publication Date:: 11-2010
Content Type:: Working Paper
Institution:: German Institute of Global and Area Studies
Abstract:: Using a micro-level approach to poverty traps, this paper explores welfare dynamics among households in post-war rural Mozambique. Conceptually, the paper builds on an asset-based approach to poverty and tests empirically, with household panel data, for the existence of a poverty trap. Findings indicate that there is little differentiation in productive asset endowments over time and that rural households gravitate towards a single equilibrium, which is at a surprisingly low level. The analysis shows that shocks and household coping behavior help to explain the observed poverty dynamics. The single low-level equilibrium points to an overall development trap in the rural farm-based economy. This is attributed to the long-term impact of the civil war, which has consolidated unfavorable economic conditions in rural areas and limited new economic opportunities outside of the agricultural sector.
Topic:: Economics, Markets, and Poverty
Political Geography:: Africa

Author:: Lena Giesbert, Susan Steiner, and Mirko Bendig
Publication Date:: 01-2009
Content Type:: Working Paper
Institution:: German Institute of Global and Area Studies
Abstract:: This paper argues that the study of the demand for financial services in developing countries leaves out part of the story, if it looks at only one of the three elements of the so called finance trinity, i.e. savings products, loans, or insurances, as is largely done in the literature. In contrast to previous research, it is assumed that households' choice for any of these services is strongly interconnected. Therefore, the paper simultaneously estimates the determinants of household demand for savings, loans and insurances by applying a multivariate probit model on household survey data from rural Ghana. On the one hand, the estimation results confirm the common finding that poorer households are less likely to participate in the formal financial sector than better off households. On the other hand, there is empirical evidence that the usage of savings products, loans and insurances does not only depend on the socio-economic status of households, but also on various other factors, such as households' risk assessment and the past exposure to shocks. In addition, trust in the providing institution and its products appear to play a key role.
Topic:: Development, Economics, International Trade and Finance, Poverty, and Third World
Political Geography:: Africa

Author:: Lena Giesbert
Publication Date:: 09-2007
Content Type:: Working Paper
Institution:: German Institute of Global and Area Studies
Abstract:: Migration and remittances are widely seen as major components of diversification strategies aimed at coping with risky environments in developing countries. The debate in the literature mainly concentrates on effects of and access to the strategy of migration. Against this background, the paper investigates patterns, determinants and the impact of internal migration on households based on data from a densely populated rural area in Western Kenya. The motivation behind migration is largely economic in kind. Accordingly, remittances account for a substantial share of household incomes. Results derived from a probit model estimation indicate that the likelihood of migration is independent from the wealth position of households. Instead, demographic household factors, education-related variables and migrant networks are of central importance. Migration and remittances are obviously more easily accessible than other opportunities of income diversification beyond farming for households across all levels of wealth, including the poorest households. JEL classification:
Topic:: Economics, Migration, and Regional Cooperation
Political Geography:: Kenya and Africa

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