True/False and Justify
1. The index in an index insurance contract should be highly correlated with the actions that farmers take to reduce the probability of harvest failure.
2. The Net Benefit Ratio (NBR) captures how a specific price change is likely to affect a given household.
3. Household members tend to have different preferences, but empirical evidence shows that overall, most households are Pareto efficient.
4. For risk averse individuals, having a greater ability to do consumption smoothing means they are more likely to choose profitable but risky activities.
5. Corruption tends to put the heaviest burden on poorer households.
6. One potential source of selection bias in Jensen’s paper on mobile phones in Kerala, India is that fishermen without a cellphone can still benefit from the “treatment”.
7. Two countries with the same Gini coefficient have the same Lorenz curve.
8. Limited access to insurance is often a constraint faced by smallholder farmers that hinders agricultural productivity.
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