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Limited Insurance within the Household: Evidence from a Field Experiment in Kenya

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  • Jonathan Robinson

Abstract

In developing countries, unexpected income shocks are common but informal insurance is typically incomplete. An important question is therefore whether risk-sharing within the household is effective. This paper presents results from a field experiment with 142 married couples in Kenya in which individuals were given random income shocks. Even though the shocks were small relative to lifetime income, men increase private consumption when they receive the shock but not when their wives do, a rejection of efficiency. Such behavior is not specific to the experiment-both spouses spend more on themselves when their labor income is higher. (JEL D14, D81, G22, O12, O16)

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Applied Economics.

Volume (Year): 4 (2012)
Issue (Month): 4 (October)
Pages: 140-64

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Handle: RePEc:aea:aejapp:v:4:y:2012:i:4:p:140-64

Note: DOI: 10.1257/app.4.4.140
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Citations

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Cited by:
  1. Hebous, Sarah & Klonner, Stefan, 2014. "Economic Distress and Farmer Suicides in India: An Econometric Investigation," Working Papers 0565, University of Heidelberg, Department of Economics.
  2. Jonathan Robinson & Ethan Yeh, 2011. "Transactional Sex as a Response to Risk in Western Kenya," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 35-64, January.
  3. Hélène Couprie & Miriam Beblo & Denis Beninger & François Cochard & Astrid Hopfensitz, 2012. "Equality-Efficiency Trade-off within French and German Couples – A Comparative Experimental Study," THEMA Working Papers 2012-44, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  4. Dean Karlan, Aishwarya Lakshmi Ratan, Jonathan Zinman, 2013. "Savings by and for the Poor: A Research Review and Agenda-Working Paper 346," Working Papers 346, Center for Global Development.
  5. Esther Duflo, 2012. "Women Empowerment and Economic Development," Journal of Economic Literature, American Economic Association, vol. 50(4), pages 1051-79, December.
  6. Miriam Beblo & Denis Beninger, 2012. "Do husbands and wives pool their incomes? Experimental evidence," Working Papers of BETA 2012-10, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
  7. Jakiela, Pamela & Ozier, Owen, 2012. "Does Africa need a rotten Kin Theorem ? experimental evidence from village economies," Policy Research Working Paper Series 6085, The World Bank.
  8. Kebede, Bereket & Tarazona, Marcela & Munro, Alistair & Verschoor, Arjan, 2013. "Intra-household efficiency: An experimental study from Ethiopia," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  9. Utteeyo Dasgupta & Subha Mani, 2013. "Only Mine or All Ours: An Artefactual Field Experiment on Procedural Altruism," Fordham Economics Discussion Paper Series dp2013-01, Fordham University, Department of Economics.
  10. Carlsson, Fredrik & Yang, Xiaojun, 2013. "Intertemporal Choice Shifts in Households: Do they occur and are they good?," Working Papers in Economics 569, University of Gothenburg, Department of Economics.
  11. Alistair Munro & Bereket Kebede & Marcela Tarazona-Gomez & Arjan Verschoor, . "Autonomy or efficiency: An experiment on household decisions in two regions of India," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 11-02, School of Economics, University of East Anglia, Norwich, UK..
  12. Dean Karlan & Aishwarya Lakshmi Ratan & Jonathan Zinman, 2013. "Savings by and for the Poor: A Research Review and Agenda," Working Papers 1027, Economic Growth Center, Yale University.
  13. Thorsten Beck & Haki Pamuk & Burak R. Uras, 2014. "Entrepreneurial Saving Practices and Reinvestment: Theory and Evidence from Tanzanian MSEs," CSAE Working Paper Series 2014-15, Centre for the Study of African Economies, University of Oxford.

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