American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Risk Pooling, Risk Preferences, and Social Networks
American Economic Journal: Applied Economics
vol. 4,
no. 2, April 2012
(pp. 134–67)
Abstract
Using data from an experiment conducted in 70 Colombian communities, we investigate who pools risk with whom when trust is crucial for enforcing risk pooling arrangements. We explore the roles played by risk attitudes and social networks. Both empirically and theoretically, we find that close friends and relatives group assortatively on risk attitudes and are more likely to join the same risk pooling group, while unfamiliar participants group less and rarely assort. These findings indicate that where there are advantages to grouping assortatively on risk attitudes those advantages may be inaccessible when trust is absent or low. (JEL C93, O12, O18, Z13)Citation
Attanasio, Orazio, Abigail Barr, Juan Camilo Cardenas, Garance Genicot, and Costas Meghir. 2012. "Risk Pooling, Risk Preferences, and Social Networks." American Economic Journal: Applied Economics, 4 (2): 134–67. DOI: 10.1257/app.4.2.134Additional Materials
JEL Classification
- C93 Field Experiments
- O12 Microeconomic Analyses of Economic Development
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- Z13 Economic Sociology; Economic Anthropology; Social and Economic Stratification
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