2. Main Question What is the impact of index-based livestock insurance (IBLI) on herd stocking and movement choices of East African pastoralists (livestock herders)?  IBLI could enhance welfare by helping pastoralists smooth shocks to herd stocks due to weather.  Concern that scale-up of IBLI could lead to unsustainable environmental degradation. Introduction | Setting | Design | Data | Results | Conclusion

3. Theoretical Possibilities Herd sizes follow boom-and-bust cycles between normal weather and shocks due to drought. What happens if we introduce weather-indexed insurance that pays out during droughts? Introduction | Setting | Design | Data | Results | Conclusion Time Livestock Drought

4. Theoretical Possibilities Herd sizes follow boom-and-bust cycles between normal weather and shocks due to drought. What happens if we introduce weather-indexed insurance that pays out during droughts? Introduction | Setting | Design | Data | Results | Conclusion Time Livestock Drought

5. Theoretical Possibilities Predictions for behavioural response depend on what motivates herd accumulation choices: Precautionary savings? Lack of investment alternatives? o If precautionary savings motives dominate, then IBLI  herd size ↓ o If risk-adjusted investment motives dominate, then IBLI could  herd size ↑ Will they feel less need to move (increasing grazing intensity), due to substituting IBLI for self- insurance through costly movement, or perceiving less risk? Or trickle-through effects of herd size – e.g., more vigilant asset protection? Introduction | Setting | Design | Data | Results | Conclusion

6. Theoretical Possibilities Predictions for behavioural response depend on what motivates herd accumulation choices: Precautionary savings? Lack of investment alternatives? o If precautionary savings motives dominate, then IBLI  herd size ↓ o If risk-adjusted investment motives dominate, then IBLI could  herd size ↑ Will they feel less need to move (increasing grazing intensity), due to substituting IBLI for self- insurance through costly movement, or perceiving less risk? Or trickle-through effects of herd size – e.g., more vigilant asset protection? Introduction | Setting | Design | Data | Results | Conclusion

7. Existing Literature is Mixed Janzen and Carter (2013): Insured HH with larger asset stocks show less asset decumulation after a drought (in Kenya). Jensen et al (2014): IBLI leads to decumulation of herd assets (in Kenya). Cole et el (2013): weather index insurance leads Indian farmers to more risky production choices. Introduction | Setting | Design | Data | Results | Conclusion

8. Mobile Pastoralism Arid and semi-arid rangelands of southern Ethiopia (Borena plateau). Over 8 million migrant pastoralists in Ethiopia, accounting for significant proportion of agricultural GDP and grazing land. Introduction | Setting | Design | Data | Results | Conclusion Implications for food security and use of otherwise unproductive land.

9. Mobile Pastoralism Bi-annual dry seasons in which local forage and water resources are not enough to sustain most herds. Hence mobile pastoralists temporarily migrate to remote water points and pastures. o Occupational ladder: sedentarism  mobile pastoralism  diversification Introduction | Setting | Design | Data | Results | Conclusion

10. Mobile Pastoralism Introduction | Setting | Design | Data | Results | Conclusion

11. Mobile Pastoralism Introduction | Setting | Design | Data | Results | Conclusion

12. Mobile Pastoralism Every 3-5 years there have been more severe droughts. Introduction | Setting | Design | Data | Results | Conclusion

13. Index Insurance (IBLI) In response to this, colleagues at Cornell, UC Davis and the International Livestock Research Institute (Nairobi, Kenya) began developing an index-based livestock insurance (IBLI) product around 2005, and rolled it out in 2009. Index-based: uses weather data to detect high probability of herd loss. Livestock insurance: households can directly insure cattle. Introduction | Setting | Design | Data | Results | Conclusion

14. What We Do Randomly allocate free IBLI contracts covering 15 cattle, to 10 households (10 control). o Sample stratified to cover 4 segments of herd size distribution (trimming poor, immobile HH and rich ones), in 5 villages. GPS collar data: In order to study impacts on movement, track 3 cows per household (so 60 collars in total) using satellite-based GPS collars. August, 2011 to present (some gaps due to collar issues/failure). Record exact location at 5 minute intervals. Introduction | Setting | Design | Data | Results | Conclusion

15. Data: GPS Collaring Introduction | Setting | Design | Data | Results | Conclusion

16. Several Globules of Concentrated Use Several Globules of Concentrated Use High Potential for Environmental Impact Linear, Trailing Features Limited Foraging Extent Each Globule Centered Around a Watering Point. Globular Movement Pattern Globular Movement Pattern

17. Foraging Loops Very Extensive Movement Patterns Very Extensive Movement Patterns Foraging Much More Dispersed. Daily Watering Generally Less Impactful.

18. Data: Checking Baseline Balance Introduction | Setting | Design | Data | Results | Conclusion 1 TLU = 1 adult cow TreatmentControl Variable name MeanSDMeanSDDifference Age HH head49.559.5549.9516.720.93 Sex HH head1.000.001.100.310.15 Num HH member7.903.168.405.070.71 Num subherds3.651.042.751.020.01*** TLU whole herd32.1541.2126.4019.630.58 TLU cattle only36.7541.8929.7522.420.51 IBLI know. Index (/8)5.400.825.500.830.70 Concern 11.570.871.501.050.81 Concern 21.260.911.841.690.19 Concern 30.830.680.760.610.72 Concern 40.580.560.620.610.86 Concern 50.680.670.710.920.91 Concern 60.710.860.710.750.99 Concern 70.750.870.780.840.91 Concern 80.560.520.640.670.66 Concern 90.930.870.89 0.88 Concern 100.690.720.780.950.74 N20 Note: *** p<0.01, ** p<0.05, * p<0.1 Note: TLU = Tropical Livestock Units (1 TLU = 1 cow = 0.7 camels = 0.1 sheep or goats)

19. Econometric Approach Introduction | Setting | Design | Data | Results | Conclusion

20. Results: Impacts on Asset Accumulation: TLU cattle Introduction | Setting | Design | Data | Results | Conclusion At baseline: mean(TLU cattle) = 29.3, sd(TLU cattle) = 32 (1)(3) Treatment -154.319**-64.221 -68.823-66.392 Post -22.114**-57.955 -9.595-79.872 Treament*Post 11.167*36.459 -5.711-60.818 Age of HH Head 28.638*** 30.249** -10.536-13.788 Age of HH head squared-0.117-0.133 -0.079-0.11 HH members -109.285*** -122.133*** -31.342-41.562 Post*IBLI index 6.581 -14.454 Treatment*Post*IBLI index -4.631 -10.874 R-squared0.939 Adj. R-squared0.9190.917 N100 * p<0.10, ** p<0.05, *** p<0.01 Note: All regresssion control for HH fixed effects. IBLI increases herd accumulation by about 11 TLU, about 1/3 of mean herd size and 1/3 of the sd.

21. Results: Impacts on Asset Accumulation: TLU cattle Introduction | Setting | Design | Data | Results | Conclusion At baseline: mean(TLU cattle) = 29.3, sd(TLU cattle) = 32 (1)(3) Treatment -154.319**-64.221 -68.823-66.392 Post -22.114**-57.955 -9.595-79.872 Treament*Post 11.167*36.459 -5.711-60.818 Age of HH Head 28.638*** 30.249** -10.536-13.788 Age of HH head squared-0.117-0.133 -0.079-0.11 HH members -109.285*** -122.133*** -31.342-41.562 Post*IBLI index 6.581 -14.454 Treatment*Post*IBLI index -4.631 -10.874 R-squared0.939 Adj. R-squared0.9190.917 N100 * p<0.10, ** p<0.05, *** p<0.01 Note: All regresssion control for HH fixed effects. The mean herd size result does not vary in knowledge of IBLI

22. Results: Impacts on Max Distance Travelled Introduction | Setting | Design | Data | Results | Conclusion (1)(2)(3) Treatment 4.350***-3.867. -0.099-3.919. Post-0.064-0.113 -1.159*** -0.052-0.146-0.378 Treament*Post0.1010.097 5.103*** -0.084 -0.591 Age of HH Head 0.552***0.217 -0.169-0.177 Age of HH head squared -0.005*** -0.003** -0.001 HH members -0.651*-0.163 -0.353-0.527 Number IBLI Q correct (/8) 0.588 -2.21 Post*IBLI index 0.205*** -0.065 Treatment*IBLI index -0.252 -0.896 Treatment*Post*IBLI index -0.942*** -0.109 R-squared0.7290.730.731 Adj. R-squared0.729 0.731 N17569 * p<0.10, ** p<0.05, *** p<0.01 Note: All regresssion control for HH fixed effects. No significant average effect of IBLI on max distance travelled. At baseline: mean(Max. Dist. Traveled) = 4.2 km, sd(Max. Dist. Traveled) = 3 km

23. Results: Impacts on Max Distance Travelled Introduction | Setting | Design | Data | Results | Conclusion (1)(2)(3) Treatment 4.350***-3.867. -0.099-3.919. Post-0.064-0.113 -1.159*** -0.052-0.146-0.378 Treament*Post0.1010.097 5.103*** -0.084 -0.591 Age of HH Head 0.552***0.217 -0.169-0.177 Age of HH head squared -0.005*** -0.003** -0.001 HH members -0.651*-0.163 -0.353-0.527 Number IBLI Q correct (/8) 0.588 -2.21 Post*IBLI index 0.205*** -0.065 Treatment*IBLI index -0.252 -0.896 Treatment*Post*IBLI index -0.942*** -0.109 R-squared0.7290.730.731 Adj. R-squared0.729 0.731 N17569 * p<0.10, ** p<0.05, *** p<0.01 Note: All regresssion control for HH fixed effects. Max distance decreases by ~1 km (25% of mean) per day per correct question (out of 8) At baseline: mean(Max. Dist. Traveled) = 4.2 km, sd(Max. Dist. Traveled) = 3 km

24. Results: Impacts on Average Speed Introduction | Setting | Design | Data | Results | Conclusion (1)(2)(3) Treatment 0.617*** 0.691**. -0.008-0.343. Post0.005 0.036*** -0.071** -0.004-0.013-0.032 Treament*Post 0.020*** 0.019*** 0.476*** -0.007 -0.048 Age of HH Head 0.016-0.015 Age of HH head squared -0.000*** -0.000* 0.00 HH members 0.038 -0.140*** -0.031-0.045 Number IBLI Q correct (/8) 0.645*** -0.192 Post*IBLI index 0.021*** -0.006 Treatment*IBLI index 0.202*** -0.079 Treatment*Post*IBLI index -0.086*** -0.009 R-squared0.893 0.894 Adj. R-squared0.893 0.894 N17569 * p<0.10, ** p<0.05, *** p<0.01 Note: All regresssions control for HH fixed effects. IBLI increases average speed (economically small effect, 3.1% of mean, 6.7% of sd). At baseline: mean(Avg. Speed) = 0.63 km/hr, sd(Avg. Speed) = 0.3 km/hr

25. Results: Impacts on Average Speed Introduction | Setting | Design | Data | Results | Conclusion (1)(2)(3) Treatment 0.617*** 0.691**. -0.008-0.343. Post0.005 0.036*** -0.071** -0.004-0.013-0.032 Treament*Post 0.020*** 0.019*** 0.476*** -0.007 -0.048 Age of HH Head 0.016-0.015 Age of HH head squared -0.000*** -0.000* 0.00 HH members 0.038 -0.140*** -0.031-0.045 Number IBLI Q correct (/8) 0.645*** -0.192 Post*IBLI index 0.021*** -0.006 Treatment*IBLI index 0.202*** -0.079 Treatment*Post*IBLI index -0.086*** -0.009 R-squared0.893 0.894 Adj. R-squared0.893 0.894 N17569 * p<0.10, ** p<0.05, *** p<0.01 Note: All regresssion control for HH fixed effects. At baseline: mean(Avg. Speed) = 0.63 km/hr, sd(Avg. Speed) = 0.3 km/hr Average speed significantly decreases in knowledge of IBLI (14% of mean, 29% of sd per correct question)

26. Conclusion and Discussion Evidence of an economically-significant impact of IBLI on asset accumulation.  Consistent with fears about excess accumulation. Interesting interaction in IBLI knowledge – potentially increasing grazing intensity. Future Work Richer measures of movement. More fine-grained analysis (sub-herd level). Bring in data from large HH survey: o Potential for IV on insurance uptake from larger sample (using cruder movement data on large HH survey). Introduction | Setting | Design | Data | Results | Conclusion