Authors:

  • Richard Hornbeck

Excerpt

(Measured) Profit is Not Welfare: Evidence from an Experiment on Bundling Microcredit and Insurance. Richard Hornbeck, September 2014, Paper. "We analyze a randomized trial in which microfinance loans were bundled with an unpopular (but cheap) health insurance policy. In randomly assigned treatment villages, purchase of the insurance policy was made mandatory at the time of loan renewal. This requirement led to a 22 percentage point (or 31%) decline in loan renewal in treatment villages, compared to control villages where the insurance policy was not introduced. The insurance policy itself turned out to be useless..."