Jing Cai
Assistant Professor of Economics, University of Michigan
Assistant Professor of Economics, University of Michigan
Jing Cai is currently an assistant professor in the Department of Economics at the University of Michigan. She received her Ph.D. from the University of California at Berkeley in 2012. Her current research focuses on the role of social networks in information diffusion, adoption and impacts of new financial products in developing countries, impacts of tax incentives on firm behavior, and the effect of political connections on firm performance.
Using data from a randomized experiment in rural China, this paper studies the influence of social networks on weather insurance adoption and the mechanisms through which social networks operate. To quantify network effects, the experiment provides financial education to a random subset of farmers. For untreated farmers, the effect of having an additional treated friend on take- up is equivalent to offering a 15% reduction in the insurance premium. By varying the information available about peers’ decisions and using randomized default options, the experiment shows that the positive social network effect is not driven by the diffusion of information on purchase decisions, but instead by the diffusion of knowledge about insurance. We also find that social network effects are larger when people who are the first to receive financial education are more central in the social network.