The fight against poverty is an urgent global challenge. Microinsurance is promoted as a valuable instrument for buffering income losses due to health or climate-related risks of low-income households in developing countries. However, apart from direct positive effects they can have unintended side effects when insured households lower their contribution to traditional arrangements where risk is shared through private monetary support.
RiskNetABM is an agent-based model that captures dynamics between income losses, insurance payments and informal risk-sharing. The model explicitly includes decisions about informal transfers. It can be used to assess the impact of insurance products and informal risk-sharing arrangements on the resilience of smallholders. Specifically, it allows to analyze whether and how economic needs (i.e. level of living costs) and characteristics of extreme events (i.e. frequency, intensity and type of shock) influence the ability of insurance and informal risk-sharing to buffer income shocks. Two types of behavior with regard to private monetary transfers are explicitly distinguished: (1) all households provide transfers whenever they can afford it and (2) insured households do not show solidarity with their uninsured peers.
The model is stylized and is not used to analyze a particular case study, but represents conditions from several regions with different risk contexts where informal risk-sharing networks between smallholder farmers are prevalent.
For the publication in PLOS ONE (see below), model version 1.0.1 was used.
Release Notes
2020-07-20: Version 1.0.0: first model version uploaded
2021-03-09: Version 1.0.1: small changes in model description (ODD+D)
2021-05-03: Version 1.1.0: model version using empirical network and income data from the Philippines
Associated Publications
Will, M.; Groeneveld, J.; Lenel, F.; Frank, K. & Müller, B. Determinants of Household Vulnerability in Networks with Formal Insurance and Informal Risk-Sharing. Ecological Economics, 212, 107921, 2023. https://doi.org/10.1016/j.ecolecon.2023.107921
Will, M.; Groeneveld, J.; Frank, K. & Müller, B. Informal risk-sharing between smallholders may be threatened by formal insurance: Lessons from a stylized agent-based model. PLOS ONE, 16, e0248757, 2021. https://doi.org/10.1371/journal.pone.0248757
RiskNetABM 1.1.0
Submitted byMeike WillPublished May 03, 2021
Last modified Jul 09, 2023
The fight against poverty is an urgent global challenge. Microinsurance is promoted as a valuable instrument for buffering income losses due to health or climate-related risks of low-income households in developing countries. However, apart from direct positive effects they can have unintended side effects when insured households lower their contribution to traditional arrangements where risk is shared through private monetary support.
RiskNetABM is an agent-based model that captures dynamics between income losses, insurance payments and informal risk-sharing. The model explicitly includes decisions about informal transfers. It can be used to assess the impact of insurance products and informal risk-sharing arrangements on the resilience of smallholders. Specifically, it allows to analyze whether and how economic needs (i.e. level of living costs) and characteristics of extreme events (i.e. frequency, intensity and type of shock) influence the ability of insurance and informal risk-sharing to buffer income shocks. Two types of behavior with regard to private monetary transfers are explicitly distinguished: (1) all households provide transfers whenever they can afford it and (2) insured households do not show solidarity with their uninsured peers.
The model is stylized and is not used to analyze a particular case study, but represents conditions from several regions with different risk contexts where informal risk-sharing networks between smallholder farmers are prevalent.
For the publication in PLOS ONE (see below), model version 1.0.1 was used.
Release Notes
2020-07-20: Version 1.0.0: first model version uploaded
2021-03-09: Version 1.0.1: small changes in model description (ODD+D)
2021-05-03: Version 1.1.0: model version using empirical network and income data from the Philippines
Will, M.; Groeneveld, J.; Lenel, F.; Frank, K. & Müller, B. Determinants of Household Vulnerability in Networks with Formal Insurance and Informal Risk-Sharing. Ecological Economics, 212, 107921, 2023. https://doi.org/10.1016/j.ecolecon.2023.107921
Will, M.; Groeneveld, J.; Frank, K. & Müller, B. Informal risk-sharing between smallholders may be threatened by formal insurance: Lessons from a stylized agent-based model. PLOS ONE, 16, e0248757, 2021. https://doi.org/10.1371/journal.pone.0248757
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