Water Economics and Politics Seminar Series
/ Climate change and water resources management

Charity hazard in climate disaster response: The effect of humanitarian cash transfers on demand for agricultural insurance1

Speaker: Prof. Dr Kati Krähnert | RWI – Leibniz Institute for Economic Research and Ruhr University Bochum (RUB), Germany

Moderator: Prof. Djiby Thiam | Director: WPE – Water and Production Economics, University of Cape Town (UCT), South Africa

Time: 16:00 South African Standard Time (SAST) | GMT +2

Topic: Providing assistance in the context of weather disasters can have unintended negative consequences if it disincentivises households to adapt to climate risks. This dilemma, known as charity hazard, is well justified by economic theory, yet empirical evidence remains scarce. Our paper analyses the effect of randomly distributed cash transfers during an extreme winter event on the demand for agricultural insurance among pastoralist households in Mongolia. We find that receiving the transfer does not crowd out the uptake of insurance covering weather risks in the subsequent year. Among households that have purchased insurance in the past, we find that the cash transfers significantly increase the probability of repurchasing insurance.

1 Joint work with Svenja Fluhrer, Julian Roeckert and Lukas Mogge

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Kati Krähnert

About the speaker: Kati Krähnert is a researcher in the Policy Lab "Climate Change, Development and Migration" at RWI – Leibniz Institute for Economic Research and Professor of Climate Change and Development at Ruhr University Bochum. She studies the effects of climate change on the lives of individuals in the Global South. In doing so, she considers various dimensions of human well-being, such as income, wealth, land ownership, nutrition, education and health. Another research focus is the evaluation of climate adaptation instruments, in particular weather insurance for smallholder farm households and humanitarian aid delivered in the context of extreme weather events. Her research mainly builds on new, carefully designed household surveys, which she collects with her team and in cooperation with local partners. Completed, ongoing and upcoming data collections are taking place in Mongolia, Ghana, Senegal and Vietnam.

Seminar format:

  • Live online session on Microsoft Teams
  • Duration: 1 hour
  • Live presentation with Q&A session

Who should attend: This series is open to students and faculty from academic institutions across South Africa and sub-Saharan Africa, policymakers, engineering and technical professionals, advocacy groups, NGO staff, and anyone with a keen interest in water economics and policy.

The UCT-UCR Seminar Series

This seminar is part of the UCT-UCR Seminar Series: Water Economics and Politics, a collaboration between the University of Cape Town (UCT) and University of California, Riverside (UCR). Subscribe to our mailing list to receive updates on upcoming sessions.

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