Assessing rural farmers’ willingness to pay for crop insurance scheme: Evidence from Rwanda

Figures & data

Figure 1. Map showing the study area location.

Table 1. Variable definition and descriptive statistics

Variable	Description and measurement	Sample mean	Std. dev.
Age	Age of household head (years)	45.36	12.87
Gender	1 if the household head is male, 0 otherwise	0.71	0.43
Education	Number of years of schooling	6.55	3.12
Household size	Total number of household members	4.49	1.70
Farm size	Farmland under maize production (hectare)	0.92	0.51
Group membership	1 if a farmer is a member of an association of farmers, 0 otherwise	0.58	0.46
Extension services	Contacts with extension agents (number per year)	31.27	10.35
Credit access	1 if a farmer has access to credit, 0 otherwise	0.42	0.40
Weather information	1 if a farmer has access to weather forecast information, 0 otherwise	0.35	0.28
Risk attitude	1 if a farmer is risk-averse, 0 otherwise	0.43	0.57
Livestock ownership	Amount of livestock owned in tropical livestock units (TLU)	1.29	1.24
Land tenure	1 if the land is owned by a farmer, 0 if rented	0.64	0.34
Insurance awareness	1 if a farmer is aware of crop insurance, 0 otherwise	0.39	0.45
Income	Yearly household income in (‘000 RWF)	618.41	276.49
WTP	1 if the farmer is willing to pay the crop insurance, 0 otherwise	0.73	0.37

Note: RWF denotes the Rwandan Franc currency unit and the exchange rate was 1,031.79 RWF to a US Dollar in June 2022.

Table 2. Descriptive information about farmers’ willingness to insure and premium amount to pay for crop insurance

Variable	Description	Frequency	Percentage (%)
Willingness to insure farms	Yes	241	74
	No	84	26
Insurance premium farmers are willing to pay (RWF/hectare/annum)
	0‒15,000	19	8
	15,001‒20,000	188	78
	>20,000	34	14
Minimum	13,451.75
Maximum	24,603.26
Mean	19,206.14

Note: RWF denotes the Rwandan Franc currency unit and the exchange rate was 1,031.79 RWF to a US Dollar in June 2022.

Table 3. Estimation results of the double-hurdle model for determinants of farmers’ WTI and WTP for crop insurance

Variable	WTI (First Hurdle)		WTP (Second Hurdle)
	Coefficient	Std. error	Coefficient	Std. error
Age	−0.074	0.108	−0.023	0.050
Education	2.317**	1.052	1.915**	0.666
Gender	−0.049	0.095	−0.447	0.761
Household size	0.160	0.329	−0.113**	0.029
Land tenure	1.755**	0.436	2.974**	0.964
Farm size	1.243**	0.358	3.822**	0.837
Group membership	0.679**	0.200	0.906	0.610
Extension services	−0.134	0.396	0.175	0.724
Credit access	−0.061	0.093	0.462**	0.195
Weather information	0.257	0.588	−0.306	0.829
Risk attitude	−0.406	1.141	−0.750	1.031
Livestock ownership	0.863	1.574	1.028	2.316
Insurance awareness	1.362**	0.637	0.275	0.664
Income	1.005	0.763	1.149**	0.415
Constant	−1.827	3.509	10.472**	0.763
Regression diagnostics
	Number of obs. = 325		Number of obs. = 221
	Log-likelihood = −68.134		Log-likelihood = −147.245
	LR x^2(14) = 191.14		LR x^2(14) = 247.63
	Prob>x^2 = 0.000		Prob>x^2 = 0.000
	Pseudo R^2 =0.564		Pseudo R^2 = 0.391

Note: Asterisks indicate the level of significance: ** p < 0.05.