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Inequality and risk management: Evidence from a lab experiment in Ghana

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  • Gallenstein, Richard A.

Abstract

Wealth inequality has been growing throughout the world in recent decades. In this article, I explore the impact of inequality on risk-management decisions in a developing country context. I use a lab-in-the-field experiment that introduces exogenous variation in inequality to investigate the impact of inequality on risk-sharing and insurance uptake decisions. I find that inequality does influence formation of risk-sharing agreements and demand for insurance.

Suggested Citation

  • Gallenstein, Richard A., 2022. "Inequality and risk management: Evidence from a lab experiment in Ghana," Economics Letters, Elsevier, vol. 211(C).
    • Handle: RePEc:eee:ecolet:v:211:y:2022:i:c:s0165176521004730
    DOI: 10.1016/j.econlet.2021.110235
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    More about this item

    Keywords

    Inequality; Fairness; Risk-management; Experimental games;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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