American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Informal Risk Sharing, Index Insurance, and Risk Taking in Developing Countries
American Economic Review
vol. 103,
no. 3, May 2013
(pp. 375–80)
Abstract
Preliminary findings are presented from a research project which examined the interactions between informal risk sharing, index insurance and risk-taking. Rainfall insurance contracts were randomly offered to cultivating and landless households in a set of Indian villages where preexisting census data on caste networks allowed the characterization of the nature and extent of informal risk sharing. We study how informal risk sharing mediates the demand for index insurance, whether index insurance or informal indemnification allows farmers to invest in risky technologies, and the general equilibrium effects of offering insurance contracts to cultivators and agricultural laborers.Citation
Mobarak, Ahmed Mushfiq, and Mark R. Rosenzweig. 2013. "Informal Risk Sharing, Index Insurance, and Risk Taking in Developing Countries." American Economic Review, 103 (3): 375–80. DOI: 10.1257/aer.103.3.375Additional Materials
JEL Classification
- D81 Criteria for Decision-Making under Risk and Uncertainty
- G22 Insurance; Insurance Companies
- O12 Microeconomic Analyses of Economic Development
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- Z13 Economic Sociology; Economic Anthropology; Social and Economic Stratification