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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)

Suggested Citation

  • Jonathan Robinson, 2012. "Limited Insurance within the Household: Evidence from a Field Experiment in Kenya," American Economic Journal: Applied Economics, American Economic Association, vol. 4(4), pages 140-164, October.
    • 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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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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    1. Limited Insurance within the Household: Evidence from a Field Experiment in Kenya (American Economic Journal: Applied Economics 2012) in ReplicationWiki

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