Willingness to Pay for Insured Loans in Northern Ghana Richard A. Gallenstein, Khushbu Mishra, Abdoul G. Sam and Mario J. Miranda 1 (Original submitted November 2017, revision received June 2018, accepted August 2018.) Abstract Index insurance has been heralded as a potential solution to risk management problems faced by smallholder farmers in developing countries. Despite its poten- tial, demand for standalone index insurance contracts has remained low in early field trials. We investigate the willingness to pay for drought index insurance- backed loans in northern Ghana using contingent valuation. We find that index insurance lowers overall demand for agricultural loans. We also compare micro- level index insurance, provided directly to farmers, with meso-level insurance, pro- vided to the credit agency and find that farmers appear to prefer micro-level insur- ance. Finally, farmers are willing to pay to avoid basis risk. Keywords: Contingent credit; northern Ghana; rainfall index insurance; willing- ness to pay. JEL classifications: O12, O13. 1. Introduction Index-based rainfall insurance (IBRI) is a financial tool that can promote access to credit and technology adoption among smallholder farmers in developing countries (Miranda and Vedenov, 2001; Barnett and Mahul, 2007). IBRI policies make payouts based on an objective index, such as rainfall, in contrast to indemnity-based insur- ance, which makes payouts based on verifiable policyholder losses. Index insurance 1 Richard A. Gallenstein is in the Department of Economics, The Catholic University of Amer- ica, Washington DC, USA. Email: gallenstein@cua.edu for correspondence. Khushbu Mishra is in the Department of Economics, Stetson University, Florida, USA. Abdoul G. Sam and Mario J. Miranda are both in the Department of Agricultural, Environmental, and Develop- ment Economics, The Ohio State University, Ohio, USA. We would like to acknowledge the Feed the Future Innovation Lab for Assets and Market Access for their generous support of our work. We would like to also thank the Ghana Agricultural Insurance Pool and the Associa- tion of Rural Banks for their collaboration on the project. Finally, we would like to thank the support of Dr. Francis Mulangu, Dr. Francis Kemeze, Eric Acheampong, and Sherif Sigrinah for their hard work during data collection, and two anonymous referees for their comments on an earlier draft. Journal of Agricultural Economics doi: 10.1111/1477-9552.12317 Ó 2019 The Agricultural Economics Society