This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

The network structure of informal arrangements: Evidence from rural Tanzania

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Margherita Comola
Abstract

In developing countries, whenever formal economic and financial institutions lack strength, households are forced to rely on risk sharing and other informal arrangements based on pre-existing interpersonal relationships. This paper takes a network perspective to investigate how rural households form the links through which they provide and/or get economic support, and whether the connection structure of the community affects the formation of these links. I test the hypothesis that indirect contacts matter, that is, agents take into account not only potential partners' characteristics, but also their position with respect to all other agents. A network formation framework with fully heterogeneous agents is first presented, following Jackson and Wolinsky (1996), an estimation procedure is then proposed and applied to data on a village in rural Tanzania. Results show that when agents evaluate the net advantage of forming a link they also consider the relative position and the wealth of indirect partners. My paper contributes to both network theory and the literature on risk sharing arrangements in that it proposes an innovative procedure to estimate endogenous network formation models, and provides evidence that network structure has an explanatory value disregarded by all previous studies, which are focused on direct relations only.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. 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.pse.ens.fr/document/wp200874.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by PSE (Ecole normale supérieure) in its series PSE Working Papers with number 2008-74.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 2008
Date of revision:
Handle: RePEc:pse:psecon:2008-74

Contact details of provider:
Postal: 48 boulevard Jourdan - 75014 Paris
Phone: 01 43 13 63 00
Fax: 01 43 13 63 10
Email:
Web page: http://www.pse.ens.fr/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: ().

Related research
Keywords:

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.:

  1. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September. [Downloadable!] (restricted)
  2. De Weerdt, Joachim & Dercon, Stefan, 2006. "Risk-sharing networks and insurance against illness," Journal of Development Economics, Elsevier, vol. 81(2), pages 337-356, December. [Downloadable!] (restricted)
    Other versions:
  3. Jackson, Matthew O., 2005. "The economics of social networks," Working Papers 1237, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
  4. Coate, Stephen & Ravallion, Martin, 1993. "Reciprocity without commitment : Characterization and performance of informal insurance arrangements," Journal of Development Economics, Elsevier, vol. 40(1), pages 1-24, February. [Downloadable!] (restricted)
  5. Fafchamps, Marcel & Lund, Susan, 2003. "Risk-sharing networks in rural Philippines," Journal of Development Economics, Elsevier, vol. 71(2), pages 261-287, August. [Downloadable!] (restricted)
    Other versions:
  6. Platteau, Jean-Philippe, 1995. "An Indian Model of Aristocratic Patronage," Oxford Economic Papers, Oxford University Press, vol. 47(4), pages 636-62, October. [Downloadable!] (restricted)
  7. Garance Genicot & Debraj Ray, 2003. "Group Formation in Risk--Sharing Arrangements," Review of Economic Studies, Blackwell Publishing, vol. 70(1), pages 87-113, January.
  8. Andrea Galeotti & Sanjeev Goyal, 2002. "Network Formation with Heterogeneous Players," Tinbergen Institute Discussion Papers 02-069/1, Tinbergen Institute. [Downloadable!]
    Other versions:
  9. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
  10. Francis Bloch (GREQAM and Universite de la Mediterranee), Garance Genicot (Georgetown University, and Debraj Ray (New York University and Instituto de Analisis Economico (CSIC)), . "Informal Insurance in Social Networks," Working Papers gueconwpa~04-04-16, Georgetown University, Department of Economics. [Downloadable!]
    Other versions:
  11. Matthew O. Jackson, 2003. "A Survey of Models of Network Formation: Stability and Efficiency," Game Theory and Information 0303011, EconWPA. [Downloadable!]
    Other versions:
  12. De Weerdt, Joachim, 2002. "Risk-Sharing and Endogenous Network Formation," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  13. John M. Abowd & Henry S. Farber, 1982. "Job queues and the union status of workers," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 35(3), pages 354-367, April.
  14. Calvó-Armengol, Antoni & Patacchini, Eleonora & Zenou, Yves, 2005. "Peer Effects and Social Networks in Education and Crime," CEPR Discussion Papers 5244, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  15. Farber, Henry S, 1983. "The Determination of the Union Status of Workers," Econometrica, Econometric Society, vol. 51(5), pages 1417-37, September. [Downloadable!] (restricted)
  16. Fafchamps, Marcel, 1992. "Solidarity Networks in Preindustrial Societies: Rational Peasants with a Moral Economy," Economic Development and Cultural Change, University of Chicago Press, vol. 41(1), pages 147-74, October.
  17. Christopher Udry & Timothy G. Conley, 2004. "Social Networks in Ghana," Working Papers 888, Economic Growth Center, Yale University. [Downloadable!]
  18. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October. [Downloadable!] (restricted)
    Other versions:
  19. Mace, Barbara J, 1991. "Full Insurance in the Presence of Aggregate Uncertainty," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 928-56, October. [Downloadable!] (restricted)
  20. Matthew O. Jackson & Brian W. Rogers, 2007. "Meeting Strangers and Friends of Friends: How Random Are Social Networks?," American Economic Review, American Economic Association, vol. 97(3), pages 890-915, June. [Downloadable!]
Full references

Statistics
Access and download statistics

Did you know? About 1000 archives contribute their bibliographic data to RePEc.

This page was last updated on 2009-11-24.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.