Is Consumption Insured against Illness? Evidence on Vulnerability of Households to Health Shocks in Rural Ethiopia
AbstractLow and volatile incomes and absence of well-developed financial markets make consumption smoothing an important issue in low-income countries. Based on the theory of full insurance and using 2 years of panel data, this study examines the impact of illness on the consumption of rural households and the capacity of existing risk-sharing mechanisms in insuring consumption against health shocks in the rural areas of Ethiopia. The results show that illness has a statistically significant negative impact on the stability of consumption and the capacity of households or existing intra- and interhousehold risk-sharing arrangements in insuring consumption against illness varies across different consumption items. The regression results show that the hypothesis of consumption insurance cannot be rejected in the case of total food consumption, implying that basic items that come from own production and from external sources (gifts) are better insured and insensitive to the illness of the head. However, the implication of risk sharing is rejected in the case of nonfood consumption items. The restriction test results reveal that the movement of the household head from a healthy to an unhealthy status would lower the growth rate of quarterly nonfood consumption items of the household by more than 24 percentage points. This clearly demonstrates that there would be a significant amount of welfare gain if existing endogenous risk sharing arrangements can be strengthened or some kind of community health insurance scheme can be introduced in the rural areas of Ethiopia.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by University of Chicago Press in its journal Economic Development and Cultural Change.
Volume (Year): 53 (2004)
Issue (Month): 1 (October)
Contact details of provider:
Web page: http://www.journals.uchicago.edu/EDCC/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Jacky MATHONNAT & Jean-François BRUN & Martine AUDIBERT & Marie-Claire HENRY, 2006.
"Malaria, Production and Income of the Producers of Coffee and Cocoa: an Analysis from Survey Data in Côte d’Ivoire. Malaria, coffee and cocoa production and income,"
- Martine Audibert & Jean-François Brun & Jacky Mathonnat & M.-C. Henry, 2011. "Malaria, Production and Income of the Producers of Coffee and Cocoa: an Analysis from Survey Data in Côte d'Ivoire. Malaria, coffee and cocoa production and income," Working Papers halshs-00557214, HAL.
- Bratti, Massimiliano & Mendola, Mariapia, 2014.
"Parental health and child schooling,"
Journal of Health Economics,
Elsevier, vol. 35(C), pages 94-108.
- Massimiliano Bratti & Mariapia Mendola, 2011. "Parental Health and Child Schooling," Development Working Papers 318, Centro Studi Luca d\'Agliano, University of Milano, revised 17 Oct 2011.
- M. Bratti & M. Mendola, 2012. "Parental Health and Child Schooling," CHILD Working Papers Series 4, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
- Bratti, Massimiliano & Mendola, Mariapia, 2011. "Parental Health and Child Schooling," IZA Discussion Papers 5870, Institute for the Study of Labor (IZA).
- Massimiliano Bratti & Mariapia Mendola, 2011. "Parental Health and Child Schooling," Working Papers 212, University of Milano-Bicocca, Department of Economics, revised Jul 2011.
- Verpoorten, Marijke, 2009.
"Household coping in war- and peacetime: Cattle sales in Rwanda, 1991-2001,"
Journal of Development Economics,
Elsevier, vol. 88(1), pages 67-86, January.
- Marijke Verpoorten, 2007. "Household Coping in war- and peacetime: cattle sales in Rwanda, 1991-2001," LICOS Discussion Papers 18907, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
- Marijke Verpoorten, 2007. "Household coping in war- and peacetime: cattle sales in Rwanda, 1991-2001," Center for Economic Studies - Discussion papers ces0727, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- Krishna, Anirudh, 2007. "For Reducing Poverty Faster: Target Reasons Before People," World Development, Elsevier, vol. 35(11), pages 1947-1960, November.
- Lena Giesbert & Kati Schindler, 2010.
"Assets, Shocks, and Poverty Traps in Rural Mozambique,"
GIGA Working Paper Series
150, GIGA German Institute of Global and Area Studies.
- Giesbert, Lena & Schindler, Kati, 2012. "Assets, Shocks, and Poverty Traps in Rural Mozambique," World Development, Elsevier, vol. 40(8), pages 1594-1609.
- Lena Giesbert & Kati Schindler, 2010. "Assets, Shocks, and Poverty Traps in Rural Mozambique," Discussion Papers of DIW Berlin 1073, DIW Berlin, German Institute for Economic Research.
- Gabriela Flores & Owen O'Donnell, 2012. "Catastrophic Medical Expenditure Risk," Tinbergen Institute Discussion Papers 12-078/3, Tinbergen Institute.
- Islam, Asadul & Maitra, Pushkar, 2012.
"Health shocks and consumption smoothing in rural households: Does microcredit have a role to play?,"
Journal of Development Economics,
Elsevier, vol. 97(2), pages 232-243.
- Asadul Islam & Pushkar Maitra, 2008. "Health Shocks And Consumption Smoothing In Rural Households: Does Microcredit Have A Role To Play?," Development Research Unit Working Paper Series 22/08, Monash University, Department of Economics.
- Hanjra, Munir A. & Ferede, Tadele & Gutta, Debel Gemechu, 2009. "Pathways to breaking the poverty trap in Ethiopia: Investments in agricultural water, education, and markets," Agricultural Water Management, Elsevier, vol. 96(11), pages 1596-1604, November.
- Wagstaff, Adam & Lindelow, Magnus, 2010. "Are health shocks different ? evidence from a multi-shock survey in Laos," Policy Research Working Paper Series 5335, The World Bank.
- Gabriela Flores & Owen O'Donnell, 2012.
"Catastrophic Medical Expenditure Risk,"
Tinbergen Institute Discussion Papers
12-078/3, Tinbergen Institute.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).
If references are entirely missing, you can add them using this form.