Delayed Sowing in Response to Early‐Maturing Maize Bundled With Germination Index Insurance

ABSTRACT Using a unique panel of geolocated and time‐stamped data, we study how Kenyan farmers adjust sowing timing in response to a novel de‐risking bundle of early‐maturing drought‐tolerant maize seed and germination rainfall insurance. We find that repeat users of this bundle tend to plant later and in a tighter timeframe, a behavioral pattern consistent with learning about and trusting the early maturation trait of the seed. On average, these on‐farm adjustments result in more rainfall received during the ensuing maize germination stage and, consequently, decreased total insurance payouts. This behavioral adjustment to new protection against drought risk thus appears to be a “positive moral hazard” response that increases overall welfare.