Rural pastoralist drought-index insurance payout timing and herd-recovery trajectories in Kenyan rangelands: a regression-discontinuity analysis of rainfall-trigger thresholds

Index-based livestock insurance pays out when a rainfall or vegetation trigger crosses a pre-specified threshold, yet the timing of that payout relative to the biological window of herd recovery is rarely treated as a design parameter in its own right. The framework treats the trigger threshold as the assignment variable, exploits the discontinuity in payout eligibility at that threshold, and specifies herd recovery as a dynamic outcome measured over the twelve to twenty-four months following the shock. Three mechanisms are distinguished: a liquidity mechanism operating through consumption smoothing and distress sales, a restocking mechanism operating through the price and availability of breeding stock, and an expectations mechanism operating through the credibility of future payouts. The payout-timing parameter is not a purely administrative residual but a substantive determinant of whether index insurance converts into herd recovery, and that regression-discontinuity designs at rainfall-trigger thresholds can identify it where randomised assignment is infeasible. The contribution is a specification that makes timing estimable, a set of testable propositions linking timing to each mechanism, and an account of the boundary conditions under which the design fails. No empirical estimates are reported; the paper is a methodological and conceptual treatment of a question that existing evaluations have not been designed to answer.