Doctoral Dissertation Research: The Effect of Novel Weather Insurance on Livelihood Practices

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The creation of weather index insurance (WII) as a low-cost commodity has the potential to change the way that over a billion, hitherto uninsured, low-income individuals in the developing world engage with risk. This project will investigate the possible outcomes for the purchasers of this novel insurance, both those that are stated by its proponents -- vulnerability reduction and livelihood protection -- and those unstated, such as increased risk-taking. Given that research on WII is in its early stages, with few in-depth, long-term case studies, this project will allow the researchers to not only shape the way that social scientists understand WII, but also impact the way that such insurance is designed and deployed. This project adds to the debate on the role of insurance within global capitalism. While this is difficult to address on the large scale of cities or corporations, this project's focus on individuals allows the intents and outcomes of newly introduced financialized risk management to be analyzed. The researchers will answer two broad questions: 1) What are the motivations and ideas that have informed both non-profit and for-profit groups in creating WII? 2) What are the impacts of WII on the livelihood choices, risk-sharing mechanisms, and vulnerabilities of low-income individuals? Given the large expansion in WII enrolment that will take place across the developing world, the research design will focus on one WII product in a specific place -- the Livelihood Protection Policy in St. Lucia -- but the research conclusions will be applicable to other countries that are adopting new financial products to manage climate change effects. This project will bridge two key literatures on finance and vulnerability: in the economics literature on WII there is little critical engagement with the way that space is treated as uniform for all policyholders. In contrast, the literature on how vulnerabilities vary across individuals has not engaged deeply with finance as a form of adaptive capacity. In order to answer the research questions, the investigators will conduct interviews with individuals from four livelihood groups including both purchasers and non-purchasers of WII. Interviews with the participants will occur twice, so that change over time due to WII adoption may be assessed. The researchers will also interview financial experts who have contributed to the design or sale of WII in order to understand the motivations behind WII's creation. The findings will be shared with livelihoods groups in St. Lucia, where the research will take place, who will be interested in understanding the complex effects of WII on their members' vulnerability, and shared with government ministries, which will need to understand how the adoption of WII interacts with existing risk management strategies administered by the state.