Natural disasters and informal risk sharing against illness: networks vs. groups
AbstractUsing original household panel survey data collected in rural Fiji, this paper demonstrates how informal risk-sharing institutions upon which poor people heavily rely in times of illness are vulnerable to natural disasters. First, household private cash-inkind transfers do not serve as insurance against illness in the relief phase (several months after the disaster); they do so only after pooled resources are recovered in the reconstruction phase (a few years later) (i.e., the resource effect). Second, risk-sharing arrangements are dependent on the history of labor-time transfers corresponding to housing damage: Only disaster non-victims are insured against illness, because victims have already received labor help for their rehabilitation from non-victims (i.e., the reciprocity effect). The paper also reveals that resource/reciprocity effects exist in endogenously formed networks and pre-formed groups, as risk-sharing pools to a similar degree. Not only do private transfers exchanged among households serve as insurance, but also, household contributions directly made to groups ? such as ritual gifts and religious donations ? contain risk- sharing components against illness among group members. Although the former finding is commonly evident in the literature, the latter is new. Network formation is directly related to pre-formed groups, especially kin and religious ones.
Download InfoIf 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.
Bibliographic InfoPaper provided by Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba in its series Tsukuba Economics Working Papers with number 2010-006.
Date of creation: Jul 2010
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-24 (All new papers)
- NEP-HEA-2010-07-24 (Health Economics)
- NEP-SOC-2010-07-24 (Social Norms & Social Capital)
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.:
- Stefan Dercon & Joachim De Weerdt, 2002.
"Risk-sharing networks and insurance against illness,"
CSAE Working Paper Series
2002-16, Centre for the Study of African Economies, University of Oxford.
- 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.
- Stefan Dercon & Joachim De Weerdt, 2002. "Risk-sharing Networks and Insurance against illness," Economics Series Working Papers WPS/2002-16, University of Oxford, Department of Economics.
- Stefan Dercon & Joachim de Weerdt, 2004. "Risk-Sharing Networks And Insurance Against Illness," Development and Comp Systems 0409019, EconWPA.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Yoshinori Kurokawa).
If references are entirely missing, you can add them using this form.