Advanced Search
MyIDEAS: Login to save this paper or follow this series

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

Contents:

Author Info

  • Robinson, Jonathan

Abstract

This paper presents results from a randomized …eld experiment to test for the impor- tance of limited commitment (due to incomplete contract enforceability) in explaining intra- household risk sharing arrangements in Kenya. The experiment followed 142 daily income earners and their spouses for 8 weeks. Every week, each individual had a 50% chance of receiving a 150 Kenyan shilling (US $2) income shock (equivalent to about 1.5 days’income for men and 1 week’s income for women). This paper has 2 main results. First, since the experimental payments are random, they allow for a direct test of allocative Pareto e¢ - ciency. I reject e¢ ciency, as male private goods expenditures are sensitive to the receipt of the payment. Second, the experiment varied the level of intra-household correlation in the experimental payments between couples. I …nd that women send bigger transfers to their husbands when shocks are independent or negatively correlated, a result consistent with the presence of limited commitment. I …nd no di¤erence in transfers for men, likely because the shocks were too small to cause the limited commitment constraint to bind for them.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.escholarship.org/uc/item/2px0t7pt.pdf;origin=repeccitec
Download Restriction: no

Bibliographic Info

Paper provided by Department of Economics, UC Santa Cruz in its series Santa Cruz Department of Economics, Working Paper Series with number qt2px0t7pt.

as in new window
Length:
Date of creation: 17 Apr 2008
Date of revision:
Handle: RePEc:cdl:ucscec:qt2px0t7pt

Contact details of provider:
Postal: Santa Cruz, CA 95064
Phone: (831) 459-2743
Fax: (831) 459-5077
Email:
Web page: http://www.escholarship.org/repec/ucscecon/
More information through EDIRC

Related research

Keywords: limited commitment; contract enforceability; intrahousehold risk sharing;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Townsend, R.M., 1991. "Risk and Insurance in Village India," University of Chicago - Economics Research Center, Chicago - Economics Research Center 91-3, Chicago - Economics Research Center.
  2. Pierre-André Chiappori & Bernard Fortin & Guy Lacroix, 2001. "Marriage Market, Divorce Legislation and Household Labor Supply," CIRANO Working Papers, CIRANO 2001s-16, CIRANO.
  3. Duncan Thomas, 1990. "Intra-Household Resource Allocation: An Inferential Approach," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 25(4), pages 635-664.
  4. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive, David K. Levine 7656, David K. Levine.
  5. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(3), pages 437-67, June.
  6. Vegard Iversen & Cecile Jackson & Bereket Kebede & Alistair Munro & Arjan Verschoor, 2010. "Do spouses realise cooperative gains? Experimental evidence from rural Uganda," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS), School of Economics, University of East Anglia, Norwich, UK. 10-02, School of Economics, University of East Anglia, Norwich, UK..
  7. Andrew D. Foster & Mark R. Rosenzweig, 2001. "Imperfect Commitment, Altruism, And The Family: Evidence From Transfer Behavior In Low-Income Rural Areas," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 83(3), pages 389-407, August.
  8. Charness, Gary B & Genicot, Garance, 2008. "Informal Risk Sharing in an Infinite-horizon Experiment," University of California at Santa Barbara, Economics Working Paper Series, Department of Economics, UC Santa Barbara qt9sn8t91g, Department of Economics, UC Santa Barbara.
  9. Gary Charness, University of California, Santa Barbara and Garance Genicot,Georgetown University, 2004. "An Experimental Test of Risk-Sharing Arrangements," Working Papers, Georgetown University, Department of Economics gueconwpa~04-04-02, Georgetown University, Department of Economics.
  10. Gustavo J. Bobonis, 2009. "Is the Allocation of Resources within the Household Efficient? New Evidence from a Randomized Experiment," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 117(3), pages 453-503, 06.
  11. Pedro Albarran & Orazio P. Attanasio, 2003. "Limited Commitment and Crowding out of Private Transfers: Evidence from a Randomised Experiment," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 113(486), pages C77-C85, March.
  12. Dubois, Pierre & Ligon, Ethan A., 2011. "Incentives and nutrition for rotten kids: intrahousehold food allocation in the Philippines," CUDARE Working Paper Series, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy 1114, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  13. François Bourguignon & Martin Browning & Pierre-André Chiappori, 2006. "Efficient Intra-household Allocations and Distribution Factors: Implications and Identification," CAM Working Papers, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics 2006-02, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  14. Vegard Iversen & Cecile Jackson & Bereket Kebede & Alistair Munro & Arjan Verschoor, 2006. "What`s love got to do with it? An experimental test of household models in East Uganda," Economics Series Working Papers, University of Oxford, Department of Economics WPS/2006-01, University of Oxford, Department of Economics.
  15. Shiv Saini & Maurizio Mazzocco, 2010. "Testing Efficient Risk Sharing with Heterogeneous Risk Preferences," 2010 Meeting Papers, Society for Economic Dynamics 237, Society for Economic Dynamics.
  16. Banerjee, Abhijit & Duflo, Esther, 2006. "The Economic Lives of the Poor," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5968, C.E.P.R. Discussion Papers.
  17. Stefan Dercon & Pramila Krishnan, 1997. "In sickness and in health... risk-sharing within households in rural Ethiopia," Economics Series Working Papers, University of Oxford, Department of Economics WPS/1997-12, University of Oxford, Department of Economics.
  18. Martin Browning & Pierre-Andre Chiappori, 1994. "Efficient Intra-Household Allocations: a General Characterization and Empirical Tests," Department of Economics Working Papers, McMaster University 1994-02, McMaster University.
  19. Abigail Barr, 2003. "Risk Pooling, Commitment and Information: An experimental test of two fundamental assumptions," Working Papers, The Field Experiments Website 2082, The Field Experiments Website.
  20. Shelly J. Lundberg & Robert A. Pollak & Terence J. Wales, 1997. "Do Husbands and Wives Pool Their Resources? Evidence from the United Kingdom Child Benefit," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 32(3), pages 463-480.
  21. Fafchamps, Marcel & Lund, Susan, 2003. "Risk-sharing networks in rural Philippines," Journal of Development Economics, Elsevier, Elsevier, vol. 71(2), pages 261-287, August.
  22. Paxson, Christina H, 1992. "Using Weather Variability to Estimate the Response of Savings to Transitory Income in Thailand," American Economic Review, American Economic Association, American Economic Association, vol. 82(1), pages 15-33, March.
  23. Ligon, Ethan & Thomas, Jonathan P & Worrall, Tim, 2002. "Informal Insurance Arrangements with Limited Commitment: Theory and Evidence from Village Economies," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 69(1), pages 209-44, January.
  24. Marcus Goldstein, 2004. "Intrahousehold efficiency and individual insurance in Ghana," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 6644, London School of Economics and Political Science, LSE Library.
  25. Jonathan Robinson & Ethan Yeh, 2011. "Transactional Sex as a Response to Risk in Western Kenya," American Economic Journal: Applied Economics, American Economic Association, American Economic Association, vol. 3(1), pages 35-64, January.
  26. Esther Duflo, 2003. "Grandmothers and Granddaughters: Old-Age Pensions and Intrahousehold Allocation in South Africa," World Bank Economic Review, World Bank Group, World Bank Group, vol. 17(1), pages 1-25, June.
  27. Garance Genicot, Orazio Attanasio, Abigail Barr, Juan Camilo Cardenas and Costas Meghir, 2011. "Risk Pooling, Risk Preferences, and Social Networks," Working Papers, Georgetown University, Department of Economics gueconwpa~11-11-05, Georgetown University, Department of Economics.
  28. Anderson, K.S. & Baland, J-M., 2000. "The Economics of Roscas and Intra-Household Resource Allocation," Discussion Paper, Tilburg University, Center for Economic Research 2000-83, Tilburg University, Center for Economic Research.
  29. Lundberg, S.J. & Pollak, R.A. & Wales, T.J., 1994. "Do Husbands and Wives Pool Their Resources? Evidence from U.K. Child Benefit," Working Papers, University of Washington, Department of Economics 94-6, University of Washington, Department of Economics.
  30. Akresh, Richard, 2005. "Understanding Pareto Inefficient Intrahousehold Allocations," IZA Discussion Papers, Institute for the Study of Labor (IZA) 1858, Institute for the Study of Labor (IZA).
  31. Coate, Stephen & Ravallion, Martin, 1993. "Reciprocity without commitment : Characterization and performance of informal insurance arrangements," Journal of Development Economics, Elsevier, Elsevier, vol. 40(1), pages 1-24, February.
  32. Hoddinott, John & Haddad, Lawrence, 1995. "Does Female Income Share Influence Household Expenditures? Evidence from Cote d'Ivoire," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 57(1), pages 77-96, February.
  33. Nava Ashraf, 2009. "Spousal Control and Intra-household Decision Making: An Experimental Study in the Philippines," American Economic Review, American Economic Association, American Economic Association, vol. 99(4), pages 1245-77, September.
  34. Ravallion, Martin & Dearden, Lorraine, 1988. "Social Security in a "Moral Economy": An Empirical Analysis for Java," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 70(1), pages 36-44, February.
  35. John Hoddinott and Lawrence Haddad, 1994. "Does female income share influence household expenditures? evidence from Côte d`Ivoire," Economics Series Working Papers, University of Oxford, Department of Economics WPS/1994-17, University of Oxford, Department of Economics.
  36. Browning, M. & Bourguignon, F. & Chiappori, P.A. & Lechene, V., 1992. "Incomes and Outcomes: A structural Model of Intra-Household Allocation," DELTA Working Papers, DELTA (Ecole normale supérieure) 92-23, DELTA (Ecole normale supérieure).
  37. Udry, Christopher, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 61(3), pages 495-526, July.
  38. John Hoddinott & Lawrence Haddad, 1994. "Does female income share influence household expenditures? Evidence from the Côte d'Ivoire," CSAE Working Paper Series, Centre for the Study of African Economies, University of Oxford 1994-17, Centre for the Study of African Economies, University of Oxford.
  39. Esther Duflo & Christopher Udry, 2003. "Intrahousehold Resource Allocation in Côte D'ivoire: Social Norms, Separate Accounts and Consumption Choices," Working Papers, Economic Growth Center, Yale University 857, Economic Growth Center, Yale University.
  40. Udry, Christopher, 1996. "Gender, Agricultural Production, and the Theory of the Household," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 104(5), pages 1010-46, October.
  41. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 47(2), pages 448-74, June.
  42. repec:fth:oxesaf:94.17 is not listed on IDEAS
  43. Doss, Cheryl R, 2001. "Is Risk Fully Pooled within the Household? Evidence from Ghana," Economic Development and Cultural Change, University of Chicago Press, University of Chicago Press, vol. 50(1), pages 101-30, October.
  44. Ligon, Ethan, 1998. "Risk Sharing and Information in Village Economics," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 65(4), pages 847-64, October.
  45. Maurizio Mazzocco & Shiv Saini, 2012. "Testing Efficient Risk Sharing with Heterogeneous Risk Preferences," American Economic Review, American Economic Association, American Economic Association, vol. 102(1), pages 428-68, February.
  46. repec:cdl:agrebk:2221195 is not listed on IDEAS
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Dean Karlan & Aishwarya Lakshmi Ratan & Jonathan Zinman, 2013. "Savings by and for the Poor: A Research Review and Agenda," Working Papers, Economic Growth Center, Yale University 1027, Economic Growth Center, Yale University.
  2. Beblo, Miriam & Beninger, Denis & Cochard, François & Couprie, Hélène & Hopfensitz, Astrid, 2012. "Equality-Efficiency Trade-off within French and German Couples – A Comparative Experimental Study," TSE Working Papers, Toulouse School of Economics (TSE) 12-374, Toulouse School of Economics (TSE).
  3. Robinson, Jonathan & Yeh, Ethan, 2008. "Transactional Sex as a Response to Risk in Western Keny," MPRA Paper, University Library of Munich, Germany 7350, University Library of Munich, Germany.
  4. Thorsten Beck & Haki Pamuk & Burak R. Uras, 2014. "Entrepreneurial Saving Practices and Reinvestment: Theory and Evidence from Tanzanian MSEs," CSAE Working Paper Series, Centre for the Study of African Economies, University of Oxford 2014-15, Centre for the Study of African Economies, University of Oxford.
  5. 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), School of Economics, University of East Anglia, Norwich, UK. 11-02, School of Economics, University of East Anglia, Norwich, UK..
  6. Kebede, Bereket & Tarazona, Marcela & Munro, Alistair & Verschoor, Arjan, 2013. "Intra-household efficiency: An experimental study from Ethiopia," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  7. Miriam Beblo & Denis Beninger, 2012. "Do husbands and wives pool their incomes? Experimental evidence," Working Papers of BETA, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg 2012-10, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
  8. Esther Duflo, 2012. "Women Empowerment and Economic Development," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 50(4), pages 1051-79, December.
  9. Carlsson, Fredrik & Yang, Xiaojun, 2013. "Intertemporal Choice Shifts in Households: Do they occur and are they good?," Working Papers in Economics, University of Gothenburg, Department of Economics 569, University of Gothenburg, Department of Economics.
  10. Jakiela, Pamela & Ozier, Owen, 2012. "Does Africa need a rotten Kin Theorem ? experimental evidence from village economies," Policy Research Working Paper Series, The World Bank 6085, The World Bank.
  11. Utteeyo Dasgupta & Subha Mani, 2013. "Only Mine or All Ours: An Artefactual Field Experiment on Procedural Altruism," Fordham Economics Discussion Paper Series, Fordham University, Department of Economics dp2013-01, Fordham University, Department of Economics.
  12. Hebous, Sarah & Klonner, Stefan, 2014. "Economic Distress and Farmer Suicides in India: An Econometric Investigation," Working Papers, University of Heidelberg, Department of Economics 0565, University of Heidelberg, Department of Economics.
  13. Dean Karlan, Aishwarya Lakshmi Ratan, Jonathan Zinman, 2013. "Savings by and for the Poor: A Research Review and Agenda-Working Paper 346," Working Papers, Center for Global Development 346, Center for Global Development.

Lists

This item is featured on the following reading lists or Wikipedia pages:
  1. Limited Insurance within the Household: Evidence from a Field Experiment in Kenya (AEJ:AE 2012) in ReplicationWiki

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cdl:ucscec:qt2px0t7pt. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.