Measuring farmers’ preferences for weather index insurance in the Ayeyarwady Delta, Myanmar: a discrete choice experiment approach

Abstract

Abstract This study examines farmers’ preferences for weather index insurance (WII) in the Ayeyarwady Delta, Myanmar, using discrete choice experiments. It employs data taken from a survey of 317 rice farmers in the district of Labutta in the Ayeyarwady Region, which was conducted in March 2019. After being informed about WII and the trigger conditions, farmers were asked to answer discrete choice questions on WII packages. The hypothetical WII packages consisted of three attributes: the types of disaster that the insurance covers, the insurance coverage rate, and the annual insurance premium rate. A random parameter logit model analysis of the responses reveals that farmers prefer the WII packages covering cyclones, floods, and droughts to that for salt damage. The probabilities of selecting 64 hypothetical WII packages calculated from the estimates indicate that more than 50% of farmers can be expected to purchase seven WII packages for cyclones, floods, and droughts.