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  • Journal of Marketing Research (JMR)

Marketing Complex Financial Products in Emerging Markets: Evidence from Rainfall Insurance in India

By: Sarthak Gaurav, Shawn A. Cole and Jeremy Tobacman
  • Format:Print
  • | Pages:13
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Abstract

Recent financial liberalization in emerging economies has led to the rapid introduction of new financial products. Lack of experience with financial products, low levels of education, and low financial literacy may slow adoption of these products. This article reports on a field experiment that offered an innovative new financial product, rainfall insurance, to 600 small-scale farmers in India. A customized financial literacy and insurance education module communicating the need for personal financial management and the usefulness of formal hedging of agricultural production risks was offered to randomly selected farmers in Gujarat, India. The authors evaluate the effect of the financial literacy training and three marketing treatments using a randomized controlled trial. Financial education has a positive and significant effect on rainfall insurance adoption, increasing take-up from 8% to 16%. Only one marketing intervention, the money-back guarantee, has a consistent and large effect on farmers' purchase decisions. This guarantee, comparable to a price reduction of approximately 40%, increases demand by seven percentage points.

Keywords

Literacy; Insurance; Marketing; Decisions; Demand and Consumers; Financial Instruments; Emerging Markets; Education; Personal Finance; Agribusiness; Developing Countries and Economies; Innovation and Invention; Gujarat

Citation

Gaurav, Sarthak, Shawn A. Cole, and Jeremy Tobacman. "Marketing Complex Financial Products in Emerging Markets: Evidence from Rainfall Insurance in India." Journal of Marketing Research (JMR) 48, no. SPL (November 2011): S150–S162.
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About The Author

Shawn A. Cole

Finance
→More Publications

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    • September 2025
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More from the Authors
  • Using Satellites and Phones to Evaluate and Promote Agricultural Technology Adoption: Evidence from Smallholder Farms in India By: Shawn Cole, Tomoko Harigaya, Grady Killeen and Aparna Krishna
  • Getting to Net Zero: The Role of the Financial Sector By: Shawn Cole, Jonah Zahnd, Karina Chung and Jack Cenovic
  • Using Satellites and Phones to Evaluate and Promote Agricultural Technology Adoption: Evidence from Smallholder Farms in India By: Shawn Cole, Grady Killeen, Tomoko Harigaya and Aparna Krishna
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