Understanding Farmer’s Valuation of Agricultural Insurance: Evidence from Viet Nam

Supplementary Material

Online Appendix A

Table A.1: Robustness Results using different functional forms and starting bids for BDM game (for Main Results)

Differential Differential Differential DifferentialVariables CRRA1500 CRRA500 DARA CARA

Log of Net Total Income 31.756 31.965 25.084 44.111(29.781) (30.644) (29.193) (40.081)

Educational Grade Obtained 10.471 11.248 6.062 3.654(9.017) (9.529) (8.574) (10.521)

Age of Household Head -2.899 -2.302 -2.506 -2.364(2.211) (2.248) (2.073) (2.333)

Designated as Poor -193.687 -195.391 -173.479 -170.130(171.476) (171.446) (163.491) (190.617)

Farmer Union Membership 46.191 46.254 41.600 52.632(32.446) (32.569) (32.256) (36.781)

Log of Pesticide Investment 4.004 4.238 6.506* 4.395(2.827) (2.843) (3.916) (5.121)

Risk Coping 1: Borrow -54.065* -63.203* 21.504 40.018(29.772) (34.212) (57.652) (138.190)

Risk Coping 2: Sold land -8.383 -0.270 -25.526 -14.155(34.477) (36.973) (40.497) (48.601)

Risk Coping 3: Use Savings -31.013 -35.537 -29.630 -30.879(39.236) (40.336) (42.647) (70.814)

Risk Coping 4: Did Nothing -40.634 -37.352 -34.845 -47.407(53.803) (54.855) (49.048) (57.721)

Private Transfer Receipt -91.503** -92.751** -84.214** -92.072*(45.026) (45.443) (42.115) (47.945)

Public Transfer Receipt -28.752 -31.586 -56.696 -110.072(55.381) (55.463) (68.400) (110.515)

Borrowing Activity 71.015* 72.514* 64.439* 66.274(37.817) (38.722) (35.694) (42.565)

Any Insurance 25.940 24.980 44.401 65.608(28.679) (28.982) (31.066) (46.434)

Constant -740.948 -798.929 -651.517 -1,032.732(505.447) (516.811) (507.134) (647.685)

Observations 8,056 8,056 8,084 7,337R-squared 0.007 0.007 0.006 0.006Number of UID 2,420 2,420 2,430 2,291Household FE Yes Yes Yes YesCommune Controls Yes Yes Yes YesTime FE Yes Yes Yes YesSource: Author calculation using VARHS data.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1.CRRA1500: Differential calculated from CRRA function using starting bid of 1500 VND for BDM game for estimating RRACRRA500: Differential calculated from CRRA function using starting bid of 500 VND for BDM game for estimating RRA.DARA: Differential calculated from DARA utility function.CARA: Differential calculated from CARA utility function using starting bid of 1000 VND for estimating ARA.

Table A.2: Different Specifications for Main Results

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)Variables Differential Differentia

lDifferential Differential WTP WTP WTP WTP WTP WTP Risk Premium Risk Premium Risk Premium Risk Premium

Log of Net Total Income 32.171 41.183 31.752 31.766 28.307 30.571 27.474 27.721 29.366 11.733 -26.162 -32.672 -25.449 -25.218(30.686) (37.317) (30.418) (30.310) (22.451) (23.534) (21.953) (22.042) (23.505) (8.055) (24.827) (30.590) (24.982) (24.810)

Educational Grade Obtained 10.366 11.072 10.733 10.882 13.389* 13.454* 13.383* 13.530* 14.313* 11.475 1.011 0.404 0.579 0.579(9.309) (9.155) (9.224) (9.319) (7.290) (7.323) (7.256) (7.288) (7.670) (7.616) (6.308) (5.953) (6.080) (6.106)

Age of Household Head -3.089 -3.370 -2.934 -2.739 -1.523 -1.600 -1.487 -1.116 -1.218 -2.198 1.000 1.201 0.874 0.961(2.398) (2.499) (2.362) (2.231) (1.910) (1.935) (1.921) (1.765) (1.913) (1.862) (1.525) (1.694) (1.443) (1.605)

Farmer Union Membership 51.020 48.883 48.256 46.998 49.038* 48.062* 46.909* 46.136* 47.843* 55.414* 4.420 5.239 5.270 6.435(32.827) (31.974) (32.100) (32.504) (27.096) (26.726) (26.363) (26.740) (27.850) (31.393) (11.518) (11.290) (11.457) (11.685)

Private Transfer Receipt -92.157** -88.237** -92.841** -92.075** -64.284**

-64.144** -65.811** -64.212** -68.167**

-57.562* 30.744 26.353 29.435 29.747

(44.328) (43.047) (45.299) (45.288) (31.210) (31.217) (31.999) (31.103) (32.996) (30.841) (23.896) (21.769) (23.535) (24.007)Log of Pesticide Investment 4.139 1.280 1.205 -1.928 -2.873

(2.837) (1.874) (1.925) (1.270) (1.916)Risk Coping 1: Borrow -40.424 -61.148* -60.488* -0.143 -13.428 -10.945 -12.146 -8.286 69.555* 78.951* 79.557**

(34.097) (33.643) (33.442) (11.606) (11.493) (11.309) (11.845) (14.419) (39.010) (40.180) (39.917)Risk Coping 2: Sold land -28.659 -11.714 -4.221 -41.107* -35.980 -29.877 -32.908 -34.752 -20.771 -32.861 -33.250

(37.491) (35.878) (35.432) (24.863) (23.321) (23.912) (25.262) (22.759) (26.642) (29.110) (26.916)Risk Coping 3: Use Savings -35.901 -37.323 -32.644 -10.665 -10.604 -4.308 -5.090 17.081 40.644 41.498 42.049

(39.499) (39.666) (39.772) (23.396) (23.264) (23.089) (24.573) (18.610) (33.319) (33.571) (32.841)Risk Coping 4: Did Nothing -39.124 -38.687 -38.156 39.572 38.896 39.727 40.857 24.317 63.079 62.643 63.131

(54.583) (53.503) (54.409) (29.641) (29.144) (29.726) (30.336) (25.060) (72.420) (71.131) (71.779)Public Transfer Receipt -30.446 -53.301 -57.125 -41.182 -12.716

(55.447) (40.280) (42.911) (45.422) (32.937)Borrowing Activity 71.708* 72.452* 36.427 38.424 41.415 27.874 -41.514* -40.872*

(38.552) (38.380) (22.498) (23.637) (25.343) (21.991) (23.287) (22.811)Any Insurance 20.208 24.722 47.048 55.702 58.625 19.243 -9.914 -8.536

(29.701) (28.926) (34.056) (38.601) (40.797) (20.866) (14.707) (16.458)Designated as Poor -198.472 -203.017 -194.066 -48.588* -53.836* -39.811* -41.003* -21.627 159.126 159.941 162.153

(161.783) (164.045) (171.458) (28.400) (31.280) (23.449) (24.332) (14.066) (148.792) (148.301) (155.608)Mean Ag. Loss -0.018

(0.243)Agri. Loss 0.172

(0.403)Constant -683.764 -916.932 -725.388 -759.978 -521.702 -586.768 -582.329 -595.228 -633.577 -197.509 537.093 701.668 541.213 563.914

(494.240) (666.007) (517.266) (511.628) (417.579) (449.676) (452.433) (451.664) (478.710) (153.038) (364.887) (507.745) (361.705) (360.766)Observations 8,056 8,056 8,056 8,056 9,090 9,090 9,090 9,090 8,449 7,588 8,401 8,401 8,401 8,401R-squared 0.006 0.005 0.007 0.007 0.010 0.010 0.011 0.012 0.013 0.012 0.003 0.003 0.004 0.004Number of UID 2,420 2,420 2,420 2,420 2,671 2,671 2,671 2,671 2,463 2,383 2,433 2,433 2,433 2,433Household FE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesCommune Controls Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesTime FE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesSource: Author calculation using VARHS data.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1

Table A.3: Robustness Regression results using differential and risk-premium estimated from recent losses (Current and last period)

(1) (2) (3)Variables Differentia

lWTP Risk Premium

Log of Net Total Income 14.555 19.338 -9.949(34.141) (13.991) (29.872)

Educational Grade Obtained 11.627 13.816* 1.316(14.825) (7.487) (12.617)

Age of Household Head -2.892 -1.598 1.084(2.886) (1.909) (2.346)

Designated as Poor -269.392 -44.211 234.957(243.764) (27.038) (225.649)

Farmer Union Membership 30.061 51.437* 21.997(42.691) (29.333) (26.501)

Log of Pesticide Investment 2.759 1.368 -1.810(3.136) (2.061) (2.423)

Risk Coping 1: Borrow -112.729** -8.820 135.262**(52.631) (12.238) (55.339)

Risk Coping 2: Sold land 28.037 -30.964 -71.160(49.991) (24.214) (52.110)

Risk Coping 3: Use Savings -56.383 -22.813 64.919(69.638) (37.982) (63.449)

Risk Coping 4: Did Nothing -56.747 35.476 79.707(86.800) (27.572) (101.716)

Private Transfer Receipt -151.411* -64.859** 87.244(91.816) (32.194) (73.505)

Public Transfer Receipt -36.883 -52.703 -6.355(69.879) (42.598) (50.238)

Borrowing Activity 117.228* 38.793 -84.637*(62.266) (23.934) (46.890)

Any Insurance 48.415 61.554 -13.348(49.874) (44.568) (18.083)

Mean Loss 0.043(0.086)

Constant -459.365 -468.068 247.333(538.830) (299.061) (422.167)

Observation 7,957 8,082 8,302R-Square 0.005 0.012 0.004Number of UID 2,422 2,444 2,445Household FE Yes Yes YesCommune Controls Yes Yes YesTime FE Yes Yes YesSource: Author calculation using VARHS data.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1

Table A.4: Different Specifications for risk premium estimated from recent losses (for Results reported in Table A.3)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)

VARIABLES Differential Differential Differential Differential WTP WTP WTP WTP WTP WTP RiskPre RiskPre RiskPre RiskPre

Log of Net Total Income 15.986 27.779 14.426 14.555 28.307 30.571 27.474 27.721 19.338 11.733 -11.801 -20.901 -10.087 -9.949(34.757) (41.087) (34.176) (34.141) (22.451) (23.534) (21.953) (22.042) (13.991) (8.055) (29.906) (34.909) (29.955) (29.872)

Educational Grade Obtained 11.026 11.960 11.492 11.627 13.389* 13.454* 13.383* 13.530* 13.816* 11.475 1.890 1.105 1.333 1.316(14.880) (14.576) (14.755) (14.825) (7.290) (7.323) (7.256) (7.288) (7.487) (7.616) (12.850) (12.426) (12.592) (12.617)

Age of Household Head -3.389 -3.820 -3.145 -2.892 -1.523 -1.600 -1.487 -1.116 -1.598 -2.198 1.262 1.594 1.041 1.084(3.038) (3.175) (2.976) (2.886) (1.910) (1.935) (1.921) (1.765) (1.909) (1.862) (2.301) (2.502) (2.187) (2.346)

Farmer Union Membership 35.989 33.167 31.327 30.061 49.038* 48.062* 46.909* 46.136* 51.437* 55.414* 18.731 20.048 20.948 21.997(43.340) (42.514) (42.541) (42.691) (27.096) (26.726) (26.363) (26.740) (29.333) (31.393) (26.809) (26.682) (26.897) (26.501)

Private Transfer Receipt -151.659* -146.178* -152.446* -151.411* -64.284** -64.144** -65.811** -64.212** -64.859** -57.562* 88.384 82.175 87.145 87.244

(89.495) (87.672) (91.023) (91.816) (31.210) (31.217) (31.999) (31.103) (32.194) (30.841) (72.724) (70.070) (72.843) (73.505)Log of Pesticide Investment 2.759 1.280 1.368 -1.928 -1.810

(3.136) (1.874) (2.061) (1.270) (2.423)

Risk Coping 1: Borrow -77.165 -114.056** -112.729** -0.143 -13.428 -10.945 -8.820 -8.286 110.943** 134.925** 135.262**

(54.421) (53.212) (52.631) (11.606) (11.493) (11.309) (12.238) (14.419) (55.244) (55.869) (55.339)Risk Coping 2: Sold land -2.475 20.859 28.037 -41.107* -35.980 -29.877 -30.964 -34.752 -54.901 -70.565 -71.160

(49.719) (52.752) (49.991) (24.863) (23.321) (23.912) (24.214) (22.759) (48.090) (56.316) (52.110)Risk Coping 3: Use Savings -58.312 -61.152 -56.383 -10.665 -10.604 -4.308 -22.813 17.081 62.559 64.671 64.919

(72.423) (72.423) (69.638) (23.396) (23.264) (23.089) (37.982) (18.610) (66.372) (66.569) (63.449)Risk Coping 4: Did Nothing -57.593 -57.080 -56.747 39.572 38.896 39.727 35.476 24.317 79.398 79.207 79.707

(87.672) (85.868) (86.800) (29.641) (29.144) (29.726) (27.572) (25.060) (102.795) (100.806) (101.716)Public Transfer Receipt -36.883 -53.301 -52.703 -41.182 -6.355

(69.879) (40.280) (42.598) (45.422) (50.238)Borrowing Activity 115.997* 117.228* 36.427 38.424 38.793 27.874 -84.923* -84.637*

(62.714) (62.266) (22.498) (23.637) (23.934) (21.991) (47.395) (46.890)Any Insurance 42.268 48.415 47.048 55.702 61.554 19.243 -14.147 -13.348

(55.419) (49.874) (34.056) (38.601) (44.568) (20.866) (15.722) (18.083)Designated as Poor -272.172 -279.923 -269.392 -48.588* -53.836* -39.811* -44.211 -21.627 231.240 234.066 234.957

(228.984) (232.555) (243.764) (28.400) (31.280) (23.449) (27.038) (14.066) (215.434) (215.407) (225.649)Mean Ag. Loss 0.043

(0.086)Agri. Loss 0.172

(0.403)Constant -371.136 -668.896 -432.209 -459.365 -521.702 -586.768 -582.329 -595.228 -468.068 -197.509 224.684 450.097 232.722 247.333

(521.322) (690.926) (541.126) (538.830) (417.579) (449.676) (452.433) (451.664) (299.061) (153.038) (425.098) (540.432) (416.845) (422.167)Observations 7,957 7,957 7,957 7,957 9,090 9,090 9,090 9,090 8,082 7,588 8,302 8,302 8,302 8,302R-squared 0.004 0.003 0.005 0.005 0.010 0.010 0.011 0.012 0.012 0.012 0.003 0.002 0.004 0.004Number of UID 2,422 2,422 2,422 2,422 2,671 2,671 2,671 2,671 2,444 2,383 2,445 2,445 2,445 2,445Household FE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesCommune Controls Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesTime FE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesSource: Author calculation using VARHS data.

Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1

Table A.5: Results for Behavioural Factors for risk premium estimated from recent losses (Excluding Years 2008 and 2016 when Behavioural Factors Not Captured)

(1) (2) (3)VARIABLES Differential WTP Risk Premium

Trust -96.035 -31.193 67.670(77.385) (19.646) (69.176)

Log Gamble Value (Riskiness) -3.930 5.780* 8.700**(5.290) (3.235) (4.003)

Constant 1,072.051 -549.611 -895.716(944.174) (583.720

)(874.385)

Observations 5,240 5,335 5,442R-squared 0.022 0.024 0.021Number of UID 2,314 2,340 2,343Individual Controls Yes Yes YesHousehold FE Yes Yes YesCommune Controls Yes Yes YesTime FE Yes Yes YesSource: Author calculation using VARHS data.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1

Table A.6: Main results without the assumption of starting bids of 1000 VND (Households who never play the BDM game are excluded)

(1) (2) (3)Variables Differential WTP Risk Premium

Log of Net Total Income 50.821 29.366 -39.920(39.177) (23.505) (31.523)

Educational Grade Obtained 0.721 14.313* 4.821(6.080) (7.670) (4.382)

Age of Household Head -4.628 -1.218 1.366(3.380) (1.913) (1.611)

Designated as Poor -251.136 -41.003* 227.521(246.473) (24.332) (220.709)

Farmer Union Membership 52.443 47.843* 16.795(42.157) (27.850) (15.672)

Log of Pesticide Investment 3.885 1.205 -2.968(3.809) (1.925) (2.348)

Risk Coping 1: Borrow -30.558 -12.146 50.487(25.960) (11.845) (42.000)

Risk Coping 2: Sold land -26.972 -32.908 -16.668(43.787) (25.262) (31.233)

Risk Coping 3: Use Savings -53.288 -5.090 54.610(51.907) (24.573) (44.840)

Risk Coping 4: Did Nothing -104.895 40.857 111.402(74.458) (30.336) (100.253)

Private Transfer Receipt -93.796* -68.167** 30.025(49.754) (32.996) (27.626)

Public Transfer Receipt -15.236 -57.125 -20.934(58.679) (42.911) (39.717)

Borrowing Activity 57.818 41.415 -35.166(45.912) (25.343) (26.432)

Any Insurance 39.548 58.625 -17.147(32.384) (40.797) (18.744)

Mean Loss -0.018(0.243)

Constant -983.160 -633.577 788.582(717.993) (478.710) (502.449)

Observations 6,302 8,449 6,606R-squared 0.007 0.013 0.006Number of UID 1,990 2,463 2,012Household FE Yes Yes YesCommune Controls Yes Yes YesSource: Author calculation using VARHS data.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1Relative Risk Aversion used as a regressor for WTP but omitted in the results.

Table A.7: Different Specifications for Results without the assumption of starting bids of 1000 VND (Households who never play the BDM game are excluded Presented in Table A.6)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)VARIABLES Differential Differential Differentia

lDifferential WTP WTP WTP WTP WTP WTP RiskPre RiskPre RiskPre RiskPre

Log of Net Total Income 51.019 61.406 50.774 50.821 28.307 30.571 27.474 27.721 29.366 11.733 -40.576 -49.129 -40.334 -39.920(39.882) (49.039) (39.608) (39.177) (22.451) (23.534) (21.953) (22.042) (23.505) (8.055) (31.382) (39.580) (31.981) (31.523)

Educational Grade Obtained -0.031 0.868 0.613 0.721 13.389* 13.454* 13.383* 13.530* 14.313* 11.475 5.480 4.752 4.783 4.821(6.180) (5.841) (5.983) (6.080) (7.290) (7.323) (7.256) (7.288) (7.670) (7.616) (4.929) (4.345) (4.314) (4.382)

Age of Household Head -4.776 -5.593 -4.745 -4.628 -1.523 -1.600 -1.487 -1.116 -1.218 -2.198 1.290 1.959 1.242 1.366(3.559) (3.707) (3.537) (3.380) (1.910) (1.935) (1.921) (1.765) (1.913) (1.862) (1.505) (2.033) (1.417) (1.611)

Farmer Union Membership 54.478 52.890 53.478 52.443 49.038* 48.062* 46.909* 46.136* 47.843* 55.414* 15.886 15.913 15.519 16.795(41.318) (41.148) (41.457) (42.157) (27.096) (26.726) (26.363) (26.740) (27.850) (31.393) (15.554) (15.185) (15.423) (15.672)

Private Transfer Receipt -96.031* -88.106* -93.926* -93.796* -64.284** -64.144**

-65.811** -64.212** -68.167**

-57.562* 32.983 24.878 29.466 30.025

(49.810) (45.251) (49.346) (49.754) (31.210) (31.217) (31.999) (31.103) (32.996) (30.841) (29.621) (23.853) (27.233) (27.626)Log of Pesticide Investment 3.885 1.280 1.205 -1.928 -2.968

(3.809) (1.874) (1.925) (1.270) (2.348)Risk Coping 1: Borrow -12.074 -31.893 -30.558 -0.143 -13.428 -10.945 -12.146 -8.286 40.426 50.205 50.487

(29.441) (25.593) (25.960) (11.606) (11.493) (11.309) (11.845) (14.419) (43.244) (42.560) (42.000)Risk Coping 2: Sold land -86.332 -35.101 -26.972 -41.107* -35.980 -29.877 -32.908 -34.752 22.239 -18.773 -16.668

(56.736) (45.348) (43.787) (24.863) (23.321) (23.912) (25.262) (22.759) (33.335) (35.330) (31.233)Risk Coping 3: Use Savings -53.366 -56.109 -53.288 -10.665 -10.604 -4.308 -5.090 17.081 50.291 53.072 54.610

(51.345) (52.045) (51.907) (23.396) (23.264) (23.089) (24.573) (18.610) (44.253) (45.235) (44.840)Risk Coping 4: Did Nothing -106.721 -105.008 -104.895 39.572 38.896 39.727 40.857 24.317 112.945 111.150 111.402

(75.908) (74.133) (74.458) (29.641) (29.144) (29.726) (30.336) (25.060) (102.452) (100.030)

(100.253)

Public Transfer Receipt -15.236 -53.301 -57.125 -41.182 -20.934(58.679) (40.280) (42.911) (45.422) (39.717)

Borrowing Activity 57.387 57.818 36.427 38.424 41.415 27.874 -36.378 -35.166(47.169) (45.912) (22.498) (23.637) (25.343) (21.991) (27.408) (26.432)

Any Insurance 37.466 39.548 47.048 55.702 58.625 19.243 -19.626 -17.147(35.804) (32.384) (34.056) (38.601) (40.797) (20.866) (16.970) (18.744)

Designated as Poor -252.341 -256.181 -251.136 -48.588* -53.836* -39.811* -41.003* -21.627 221.516 222.905 227.521(232.783) (236.199) (246.473) (28.400) (31.280) (23.449) (24.332) (14.066) (212.432

)(211.663

)(220.709)

Mean Ag. Loss -0.018(0.243)

Agri. Loss 0.172(0.403)

Constant -920.095 -1,148.141 -952.657 -983.160 -521.702 -586.768 -582.329 -595.228 -633.577 -197.509 765.933 950.469 769.120 788.582(698.714) (908.262) (729.330) (717.993) (417.579) (449.676) (452.433) (451.664) (478.710) (153.038) (500.713

)(681.242) (507.988

)(502.449)

Observations 6,302 6,302 6,302 6,302 9,090 9,090 9,090 9,090 8,449 7,588 6,606 6,606 6,606 6,606R-squared 0.006 0.005 0.007 0.007 0.010 0.010 0.011 0.012 0.013 0.012 0.005 0.004 0.006 0.006Number of UID 1,990 1,990 1,990 1,990 2,671 2,671 2,671 2,671 2,463 2,383 2,012 2,012 2,012 2,012Household FE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesCommune Controls Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesTime FE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesSource: Author calculation using VARHS data.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1

Table A.8: Results for Behavioural Factors (Excluding 2008 and 2016 when Behavioural Factors not recorded) without the assumption of starting bids of 1000 VND (Households who never play the BDM game are excluded)

(1) (2) (3)VARIABLES Differential WTP Risk Premium

Trust -48.254 -28.245 19.198(34.283) (18.354) (24.578)

Log Gamble Value (Riskiness) 1.933 6.344* 4.776*(5.081) (3.393) (2.731)

Constant 579.805 -673.871 -126.498(649.536) (737.601

)(453.585)

Observations 4,121 5,515 4,302R-squared 0.019 0.025 0.027Number of UID 1,855 2,361 1,876Individual Controls Yes Yes YesHousehold FE Yes Yes YesCommune Controls Yes Yes YesTime FE Yes Yes YesSource: Author calculation using VARHS data.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1

Table A.9: Results derived using the alternate approach taking Relative risk aversion as observed values for households who play the BDM Game and means only for those periods when they do not play the BDM Game (With the assumption of 1,000 as starting bid for households who never play the Gamble).

(1) (2) (3)Variables Differential WTP Risk Premium

Log of Net Total Income 33.330 29.366 -25.449(30.363) (23.505) (24.878)

Educational Grade Obtained 11.793 14.313* -1.725(9.379) (7.670) (6.110)

Age of Household Head -2.652 -1.218 0.781(2.235) (1.913) (1.614)

Designated as Poor -194.787 -41.003* 162.013(171.448) (24.332) (155.626)

Farmer Union Membership 45.449 47.843* 8.400(31.938) (27.850) (11.705)

Log of Pesticide Investment 3.947 1.205 -3.281(2.991) (1.925) (2.041)

Risk Coping 1: Borrow -93.644** -12.146 110.277**(41.771) (11.845) (46.297)

Risk Coping 2: Sold land -9.683 -32.908 -28.176(34.016) (25.262) (27.666)

Risk Coping 3: Use Savings -39.815 -5.090 48.741(38.603) (24.573) (32.936)

Risk Coping 4: Did Nothing -40.850 40.857 65.635(54.345) (30.336) (71.811)

Private Transfer Receipt -91.871** -68.167** 30.493

(45.400) (32.996) (24.187)Public Transfer Receipt -20.816 -57.125 -20.310

(55.404) (42.911) (32.781)Borrowing Activity 74.544* 41.415 -40.138*

(38.574) (25.343) (23.457)Any Insurance 21.109 58.625 2.898

(28.460) (40.797) (16.880)Mean Loss -0.018

(0.243)Constant -795.068 -633.577 584.122

(513.138) (478.710) (363.836)Observations 8,056 8,449 8,401R-squared 0.007 0.013 0.004Number of UID 2,420 2,463 2,433Household FE Yes Yes YesCommune Controls Yes Yes YesTime FE Yes Yes YesSource: Author calculation using VARHS data.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1

Table A.10: Different Specification for Results derived using the alternate approach taking Relative risk aversion as observed values for households who play the BDM Game and means only for those periods when they do not play the BDM Game (Table A.9) (With the assumption of 1,000 as starting bid for households who never play the Gamble).

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)VARIABLES Differential Differentia

lDifferential Differential WTP WTP WTP WTP WTP WTP RiskPre RiskPre RiskPre RiskPre

Log of Net Total Income 34.005 42.703 33.389 33.330 28.307 30.571 27.474 27.721 29.366 11.733 -26.450 -32.691 -25.770 -25.449(30.795) (37.333) (30.484) (30.363) (22.451) (23.534) (21.953) (22.042) (23.505) (8.055) (24.939) (30.641) (25.045) (24.878)

Educational Grade Obtained 11.272 11.997 11.671 11.793 13.389* 13.454* 13.383* 13.530* 14.313* 11.475 -1.251 -1.883 -1.732 -1.725(9.360) (9.214) (9.283) (9.379) (7.290) (7.323) (7.256) (7.288) (7.670) (7.616) (6.318) (5.962) (6.079) (6.110)

Age of Household Head -2.961 -3.220 -2.783 -2.652 -1.523 -1.600 -1.487 -1.116 -1.218 -2.198 0.791 0.976 0.644 0.781(2.408) (2.502) (2.365) (2.235) (1.910) (1.935) (1.921) (1.765) (1.913) (1.862) (1.537) (1.704) (1.453) (1.614)

Farmer Union Membership 49.415 47.441 46.675 45.449 49.038* 48.062* 46.909* 46.136* 47.843* 55.414* 6.146 6.880 7.056 8.400(32.167) (31.300) (31.490) (31.938) (27.096) (26.726) (26.363) (26.740) (27.850) (31.393) (11.554) (11.344) (11.480) (11.705)

Private Transfer Receipt -92.198** -87.699** -92.379** -91.871** -64.284**

-64.144** -65.811** -64.212** -68.167** -57.562* 32.052 27.097 30.026 30.493

(44.574) (43.178) (45.384) (45.400) (31.210) (31.217) (31.999) (31.103) (32.996) (30.841) (24.111) (21.991) (23.719) (24.187)Log of Pesticide Investment 3.947 1.280 1.205 -1.928 -3.281

(2.991) (1.874) (1.925) (1.270) (2.041)Risk Coping 1: Borrow -72.248* -93.986** -93.644** -0.143 -13.428 -10.945 -12.146 -8.286 100.335** 109.403*

*110.277**

(41.880) (41.747) (41.771) (11.606) (11.493) (11.309) (11.845) (14.419) (45.040) (46.481) (46.297)Risk Coping 2: Sold land -32.318 -15.800 -9.683 -41.107* -35.980 -29.877 -32.908 -34.752 -16.333 -28.447 -28.176

(38.024) (35.068) (34.016) (24.863) (23.321) (23.912) (25.262) (22.759) (28.425) (29.783) (27.666)Risk Coping 3: Use Savings -41.894 -43.338 -39.815 -10.665 -10.604 -4.308 -5.090 17.081 46.851 47.475 48.741

(38.894) (39.059) (38.603) (23.396) (23.264) (23.089) (24.573) (18.610) (33.400) (33.637) (32.936)Risk Coping 4: Did Nothing -41.486 -41.149 -40.850 39.572 38.896 39.727 40.857 24.317 65.452 64.937 65.635

(54.536) (53.449) (54.345) (29.641) (29.144) (29.726) (30.336) (25.060) (72.457) (71.165) (71.811)Public Transfer Receipt -20.816 -53.301 -57.125 -41.182 -20.310

(55.404) (40.280) (42.911) (45.422) (32.781)Borrowing Activity 74.154* 74.544* 36.427 38.424 41.415 27.874 -41.119* -40.138*

(38.779) (38.574) (22.498) (23.637) (25.343) (21.991) (23.957) (23.457)Any Insurance 18.158 21.109 47.048 55.702 58.625 19.243 0.383 2.898

(29.453) (28.460) (34.056) (38.601) (40.797) (20.866) (15.266) (16.880)Designated as Poor -197.272 -201.288 -194.787 -48.588* -53.836* -39.811* -41.003* -21.627 158.761 158.025 162.013

(161.827) (164.068) (171.448) (28.400) (31.280) (23.449) (24.332) (14.066) (148.839) (148.354) (155.626)Mean Agri. Loss -0.018

(0.243)Agri. Loss 0.172

(0.403)Constant -726.746 -952.392 -762.877 -795.068 -521.702 -586.768 -582.329 -595.228 -633.577 -197.509 562.860 721.370 558.651 584.122

(497.129) (666.775) (519.024) (513.138) (417.579) (449.676) (452.433) (451.664) (478.710) (153.038) (368.422) (509.568) (364.954) (363.836)Observations 8,056 8,056 8,056 8,056 9,090 9,090 9,090 9,090 8,449 7,588 8,401 8,401 8,401 8,401R-squared 0.006 0.005 0.007 0.007 0.010 0.010 0.011 0.012 0.013 0.012 0.003 0.003 0.004 0.004Number of UID 2,420 2,420 2,420 2,420 2,671 2,671 2,671 2,671 2,463 2,383 2,433 2,433 2,433 2,433Household FE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesCommune Controls Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesTime FE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesSource: Author calculation using VARHS data.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1

Table A.11: Behavioural Results (Excluding 2008 and 2016 when Behavioural Factors not recorded) derived using the alternate approach taking Relative risk aversion as observed values for households who play the BDM Game and means only for those periods when they do not play the BDM Game (With the assumption of 1,000 as starting bid for households who never play the Gamble).

(1) (2) (3)VARIABLES Differential WTP Risk Premium

Trust -42.854 -28.245 16.685(31.555) (18.354) (24.706)

Log Gamble Value (Riskiness) -0.911 6.344* 4.864**(4.042) (3.393) (2.472)

Constant 501.691 -673.871 -356.063(559.811) (737.601

)(484.360)

Observations 5,299 5,515 5,502R-squared 0.020 0.025 0.018Number of UID 2,314 2,361 2,337Individual Controls Yes Yes YesHousehold FE Yes Yes YesCommune Controls Yes Yes YesTime FE Yes Yes YesSource: Author calculation using VARHS data.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1

Table A.12: Results using alternate approach of taking observed RRA and means RRA for missing years without the assumption of starting bid of 1000 VND (Households who never play the BDM game are excluded)

(1) (2) (3)Variables Differential WTP Risk Premium

Log of Net Total Income 52.758 29.366 -40.154(39.191) (23.505) (31.618)

Educational Grade Obtained 1.888 14.313* 1.817(6.131) (7.670) (4.408)

Age of Household Head -4.466 -1.218 1.070(3.391) (1.913) (1.625)

Designated as Poor -252.726 -41.003* 228.047(246.519) (24.332) (220.797)

Farmer Union Membership 50.617 47.843* 19.268(41.513) (27.850) (15.718)

Log of Pesticide Investment 3.604 1.205 -3.421(3.993) (1.925) (2.514)

Risk Coping 1: Borrow -75.903* -12.146 91.898*(42.486) (11.845) (52.802)

Risk Coping 2: Sold land -35.105 -32.908 -10.182(43.558) (25.262) (32.453)

Risk Coping 3: Use Savings -62.953 -5.090 63.882(51.545) (24.573) (44.922)

Risk Coping 4: Did Nothing -108.508 40.857 114.466(74.403) (30.336) (100.270)

Private Transfer Receipt -93.458* -68.167** 30.891(50.002) (32.996) (27.885)

Public Transfer Receipt -2.846 -57.125 -30.779(58.733) (42.911) (39.453)

Borrowing Activity 60.473 41.415 -34.317(46.561) (25.343) (27.425)

Any Insurance 34.660 58.625 -3.286(32.098) (40.797) (19.694)

Mean Loss -0.018(0.243)

Constant -1,029.819 -633.577 817.925(723.008) (478.710) (505.452)

Observations 6,302 8,449 6,606R-squared 0.007 0.013 0.006Number of UID 1,990 2,463 2,012Household FE Yes Yes YesCommune Controls Yes Yes YesTime FE Yes Yes YesSource: Author calculation using VARHS data on Stata14.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1

For variables in logs, all values reported as zero replaced by 1 to avoid missing observations

Table A.13: Different Specification for Results using alternate approach of taking observed RRA and means RRA for missing years without the assumption of starting bid of 1000 VND (Table A.12) (Households who never play the BDM game are excluded)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)VARIABLES Differential Differential Differentia

lDifferential WTP WTP WTP WTP WTP WTP RiskPre RiskPre RiskPre RiskPre

Log of Net Total Income 53.430 63.405 52.900 52.758 28.307 30.571 27.474 27.721 29.366 11.733 -40.931 -49.123 -40.741 -40.154(39.982) (49.063) (39.649) (39.191) (22.451) (23.534) (21.953) (22.042) (23.505) (8.055) (31.537) (39.662) (32.072) (31.618)

Educational Grade Obtained 1.184 2.066 1.821 1.888 13.389* 13.454* 13.383* 13.530* 14.313* 11.475 2.491 1.769 1.761 1.817(6.232) (5.886) (6.027) (6.131) (7.290) (7.323) (7.256) (7.288) (7.670) (7.616) (4.953) (4.390) (4.324) (4.408)

Age of Household Head -4.565 -5.349 -4.503 -4.466 -1.523 -1.600 -1.487 -1.116 -1.218 -2.198 0.960 1.609 0.885 1.070(3.567) (3.718) (3.546) (3.391) (1.910) (1.935) (1.921) (1.765) (1.913) (1.862) (1.522) (2.049) (1.432) (1.625)

Farmer Union Membership 52.731 51.234 51.657 50.617 49.038* 48.062* 46.909* 46.136* 47.843* 55.414* 17.810 17.870 17.762 19.268(40.579) (40.375) (40.769) (41.513) (27.096) (26.726) (26.363) (26.740) (27.850) (31.393) (15.579) (15.277) (15.473) (15.718)

Private Transfer Receipt -96.210* -87.378* -93.327* -93.458* -64.284** -64.144**

-65.811** -64.212** -68.167**

-57.562* 34.753 25.777 30.149 30.891

(50.183) (45.565) (49.578) (50.002) (31.210) (31.217) (31.999) (31.103) (32.996) (30.841) (29.921) (24.216) (27.511) (27.885)Log of Pesticide Investment 3.604 1.280 1.205 -1.928 -3.421

(3.993) (1.874) (1.925) (1.270) (2.514)Risk Coping 1: Borrow -55.479 -76.631* -75.903* -0.143 -13.428 -10.945 -12.146 -8.286 81.797 91.295* 91.898*

(44.087) (41.968) (42.486) (11.606) (11.493) (11.309) (11.845) (14.419) (53.166) (53.213) (52.802)Risk Coping 2: Sold land -90.988 -40.014 -35.105 -41.107* -35.980 -29.877 -32.908 -34.752 27.445 -14.121 -10.182

(56.609) (45.804) (43.558) (24.863) (23.321) (23.912) (25.262) (22.759) (34.337) (36.862) (32.453)Risk Coping 3: Use Savings -61.467 -64.238 -62.953 -10.665 -10.604 -4.308 -5.090 17.081 58.786 61.351 63.882

(51.467) (52.113) (51.545) (23.396) (23.264) (23.089) (24.573) (18.610) (44.327) (45.274) (44.922)Risk Coping 4: Did Nothing -110.091 -108.469 -108.508 39.572 38.896 39.727 40.857 24.317 116.153 114.122 114.466

(75.882) (74.085) (74.403) (29.641) (29.144) (29.726) (30.336) (25.060) (102.483) (100.061)

(100.270)

Public Transfer Receipt -2.846 -53.301 -57.125 -41.182 -30.779(58.733) (40.280) (42.911) (45.422) (39.453)

Borrowing Activity 60.691 60.473 36.427 38.424 41.415 27.874 -36.091 -34.317(47.829) (46.561) (22.498) (23.637) (25.343) (21.991) (28.405) (27.425)

Any Insurance 34.450 34.660 47.048 55.702 58.625 19.243 -7.262 -3.286(35.692) (32.098) (34.056) (38.601) (40.797) (20.866) (18.094) (19.694)

Designated as Poor -250.915 -254.575 -252.726 -48.588* -53.836* -39.811* -41.003* -21.627 221.233 220.969 228.047(232.825) (236.291) (246.519) (28.400) (31.280) (23.449) (24.332) (14.066) (212.490

)(211.796

)(220.797)

Mean Ag. Loss -0.018(0.243)

Agri. Loss 0.172(0.403)

Constant -980.003 -1,197.766 -1,003.388 -1,029.819 -521.702 -586.768 -582.329 -595.228 -633.577 -197.509 803.423 979.250 796.585 817.925(705.204) (912.357) (734.616) (723.008) (417.579) (449.676) (452.433) (451.664) (478.710) (153.038) (504.801

)(683.353) (511.403

)(505.452)

Observations 6,302 6,302 6,302 6,302 9,090 9,090 9,090 9,090 8,449 7,588 6,606 6,606 6,606 6,606R-squared 0.006 0.005 0.007 0.007 0.010 0.010 0.011 0.012 0.013 0.012 0.004 0.004 0.006 0.006Number of UID 1,990 1,990 1,990 1,990 2,671 2,671 2,671 2,671 2,463 2,383 2,012 2,012 2,012 2,012Household FE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesCommune Controls Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesTime FE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesSource: Author calculation using VARHS data.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1

Table A.14: Behavioural Results (Excluding 2008 and 2016 when Behavioural Factors not recorded) using alternate approach of taking observed RRA and means RRA for missing years without the assumption of starting bid of 1000 VND (Table A.12) (Households who never play the BDM game are excluded)

(1) (2) (3)Variables Differential WTP Risk Premium

Trust -59.417 -28.245 29.295(38.211) (18.354) (30.290)

Log Gamble Value (Riskiness) 0.832 6.344* 4.766(5.182) (3.393) (3.000)

Constant 407.533 -673.871 -19.089(695.114) (737.601) (472.570)

Observations 4,121 5,515 4,302R-squared 0.018 0.025 0.025Number of UID 1,855 2,361 1,876Household Controls Yes Yes YesHousehold FE Yes Yes YesCommune Controls Yes Yes YesTime FE Yes Yes YesSource: Author calculation using VARHS data.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1

Table A.15: Likelihood of reducing consumption due to income shock

(1) (2) (3)Variables Reduce Consumption Reduce Consumption Reduce Consumption

Log of Agri. Loss 0.020*** 0.020*** 0.020***(0.001) (0.001) (0.001)

Educational Grade Obtained -0.006** -0.008***(0.003) (0.003)

Age of Household Head -0.002 -0.002(0.002) (0.002)

Farmer Union Membership -0.005 0.008(0.014) (0.016)

Private Transfer Receipt 0.010(0.012)

Public Transfer Receipt 0.035**(0.014)

Borrowing Activity 0.039***(0.013)

Any Insurance 0.011(0.019)

Savings Activity -0.029*(0.017)

Constant 0.136*** 0.240*** 0.195**(0.028) (0.079) (0.093)

Observations 9,713 8,555 7,166R-squared 0.246 0.248 0.261Number of UID 2,555 2,446 2,379Household FE Yes Yes YesCommune FE Yes Yes YesTime FE Yes Yes YesSource: Author calculation using VARHS data.Notes: Standard Errors clustered at commune level, shown in brackets.*** p<0.01, ** p<0.05, * p<0.1Loss taken as current reported losses due to natural or agricultural shock.Reduce Consumption: Binary variable taken as 1 if a household reports reducing consumption when faced by Income shock.

Online Appendix B

The description of important variables used in the study are as follows:

1) Willingness to Pay: This measure records the absolute monetary value given for the Willingness to

Pay for agricultural households in the survey. The exact question asked in the survey: If insurance

against loss or damage of crop were available, how much would you be willing to pay for it? List in

000 VND/per year/household.

2) Value of crops: The exact wording for the question is: In last 12 months. What is total value of

output produced? The reported value in ‘000VND is assigned to the Bad state value of crops.

3) Good State Value of Crops: The value of crops is derived by summing the value of crops produced

and the value of reported loss.

4) Loss: This is the amount of loss reported, conditional on suffering from a natural disaster (floods,

droughts, typhoons) or agricultural shock (pest infestation and crop disease).

5) Mean Loss: The main analysis of the paper derives mean losses by taking the average of reported

loss in the current period and all preceding survey rounds.

6) Probability of Loss in the Commune: Calculated by taking proportion of the number of years (out

of total surveyed years), when the productivity of rice in a commune falls below the average mean

productivity of rice in that commune.

7) Average Mean Productivity of Rice: It is reported in the data in different units of weight (kg,

quintal, ton) per hectare for summer and autumn. The study takes the mean productivity over both

seasons of production.

8) Expected Value: This is the expected value of crops for a household. It is calculate using expected

utility framework over good and bad state value of crops with associated probabilities.

9) Certainty Equivalent: The expected value of crops which a risk-averse household should accept to

avoid the inherent probability of involved in agriculture.

10) Risk-Premium: Estimated by taking the difference between the expected value of crops and the

certainty equivalent. Hence, it can be interpreted as the value which a household foregoes to avoid the

gamble. The value as per the expected utility theory is the willingness to pay for actuarially fair

insurance by a rational consumer.

11) Differential: It is estimated by taking the difference between the WTP and the risk premium.

12) Net Total Income: This is net total income reported by the household for last 12 months from

sources such as wage/salary, agricultural activity, common property uses, non-farm, non-wage

economic activity, rental income, land/real estate, other assets, sales of assets, private transfers, public

transfers, and other sources.

13) Pesticide Investment: This is the amount of investment which a household makes in using

pesticide for as an agricultural input in past 12 months of the survey.

14) Educational Grade: This captures the grade which the household head completed. The grades are

as per the 12-grade system. The highest grade is secondary school.

15) Age: Derived from the year of birth of household head.

16) Farmer Union: This is a binary variable taking the value as 1 if any member of the household

belongs to farmer’s union.

17) Risk Coping: The four variables under this category are of binary nature and take the value as 1 if

a household engages in borrowing, sale of land or use of savings in order to cope up with an income

shock in following the last VARHS survey (approximately two years). Here, the value recorded is

conditional on household saying yes to the previous question whether a household suffered from an

income shock. Income shock means getting affected by the occurrence of natural disasters,

agricultural shocks, avian flu, change in crop price, shortage or change in price for key agricultural

inputs, change in prices of food, unemployment, unsuccessful employment, loss of land, crime,

divorce or abandonment, serious illness, injury or death or any other shock not included in the above.

18) Transfer Receipt (Private/Public): This is a binary variable taking the value as 1 if the household

received any money or goods from persons who are not members of their household such as relatives

living elsewhere friends or neighbours (Private Transfers) or from public institutions, e.g. insurance

money or social assistance (Public Transfers).

19) Borrowing Activity: This is a binary variable taking the value as 1 if the household borrowed

money or goods (including seeds or fertilisers) from any source from the period following the last

VARHS survey (approximately two years).

20) Any Insurance: This is a binary variable taking the value as 1 if a household possesses any kind of

insurance amongst the options such as: farmer’ insurance, fire insurance, life insurance, voluntary

social insurance, compulsory social insurance, health insurance, free health insurance for

children/poor, education insurance, vehicle insurance, or any other forms of insurance.

21) Trust: This is a binary variable taking the value as 1 if the respondent agrees to the following

question: Most people are basically honest and can be trusted.

22) Gamble Value: This is recorded as the monetary value which the respondent gives to the

following question: How much would you be willing to pay for a 1 in 10 chance of winning a prize of

2,000,000 VND?