![Offering rainfall insurance to informal insurance groups: Evidence from Ethiopia Offering rainfall insurance to informal insurance groups: Evidence from Ethiopia](/sites/default/files/styles/listing_690/public/Offering%20rainfall%20index%20insurance.pdf.png?itok=3d_xT_tx)
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We show theoretically that the presence of basis risk in index insurance makes it a complement to informal risk sharing, implying that index insurance crowds-in risk sharing and leading to a prediction that demand will be higher among groups of individuals that can share risk. We report results from Ethiopia from a first attempt to marketweather insurance to informal risk-sharing groups.