Cole, ShawnGine, XavierTobacman, JeremyTopalova, PetiaTownsend, RobertVickery, James2015-02-192013Cole, Shawn A., Xavier Gine, Jeremy Tobacman, Petia Topalova, Robert M. Townsend, and James Vickery. "Barriers to Household Risk Management: Evidence from India." American Economic Journal: Applied Economics 5, no. 1 (January 2013): 104–135.1945-7782http://nrs.harvard.edu/urn-3:HUL.InstRepos:14010996Why do many households remain exposed to large exogenous sources of non-systematic income risk? We use a series of randomized field experiments in rural India to test the importance of price and non-price factors in the adoption of an innovative rainfall insurance product. Demand is significantly price sensitive, but widespread take-up would not be achieved even if the product offered a payout ratio comparable to U.S. insurance contracts. We present evidence suggesting that lack of trust, liquidity constraints, and limited salience are significant non-price frictions that constrain demand. We suggest contract design improvements to mitigate these frictions.en-USrisk managementhousehold financeinsuranceJournal Article2015-02-1910.1257/app.5.1.104