IDEAS home Printed from https://ideas.repec.org/p/tuf/tuftec/0831.html
   My bibliography  Save this paper

Distinguishing barriers to insurance in Thai villages

Author

Listed:
  • Cynthia Kinnan

Abstract

Informal insurance is an important risk-coping mechanism in developing countries, yet this risk sharing is incomplete. Models of limited commitment, moral hazard, and hidden income have been proposed to explain incomplete informal insurance. This paper shows that the way in which history matters in forecasting consumption can be used to distinguish hidden income from limited commitment and moral hazard. The paper also develops a non-parametric test, based on over-identifying restrictions, that can test across models in the presence of nonclassical measurement error and individual-level heterogeneity. In panel data from rural Thailand, limited commitment and moral hazard are rejected. The predictions of the hidden income model are supported by the data.

Suggested Citation

  • Cynthia Kinnan, 2019. "Distinguishing barriers to insurance in Thai villages," Discussion Papers Series, Department of Economics, Tufts University 0831, Department of Economics, Tufts University.
    • Handle: RePEc:tuf:tuftec:0831
    as

    Download full text from publisher

    File URL: https://ase.tufts.edu/economics/documents/papers/2019/kinnanDistinguishingBarriers.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

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


    Cited by:

    1. Renate Strobl & Conny Wunsch, 2021. "Risky choices and solidarity: disentangling different behavioural channels," Experimental Economics, Springer;Economic Science Association, vol. 24(4), pages 1185-1214, December.
    2. Chaoran Chen & Diego Restuccia & Raul Santaeulalia-Llopis, 2022. "The Effects of Land Markets on Resource Allocation and Agricultural Productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 45, pages 41-54, July.
    3. Costas Meghir & Ahmed Mushfiq Mobarak & Ahmed Corina Mommaerts & Ahmed Melanie Morten, 2019. "Migration and Informal Insurance," Cowles Foundation Discussion Papers 2185R, Cowles Foundation for Research in Economics, Yale University, revised Aug 2020.
    4. Parantap Basu & Sigit Sulistiyo Wibowo, 2015. "An Empirical Investigation of Risk Sharing among Indonesian Households," CEGAP Working Papers 2015_02, Durham University Business School.
    5. Joachim De Weerdt & Garance Genicot & Alice Mesnard, 2019. "Asymmetry of Information within Family Networks," Journal of Human Resources, University of Wisconsin Press, vol. 54(1), pages 225-254.
    6. Fujimoto, Junichi & Lee, Junsang, 2020. "Optimal self-financing microfinance contracts when borrowers have risk aversion and limited commitment," Journal of Mathematical Economics, Elsevier, vol. 91(C), pages 60-79.
    7. Putman, Daniel S., 2020. "The Scope of Risk Pooling," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304480, Agricultural and Applied Economics Association.
    8. Li, Zhimin & Ligon, Ethan, 2020. "Inferring informal risk-sharing regimes: Evidence from rural Tanzania," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 941-955.
    9. Karlan, Dean & Morduch, Jonathan, 2010. "Access to Finance," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4703-4784, Elsevier.
    10. Patacchini, Eleonora & Barrett, Christopher & , & Walker, Thomas, 2019. "Altruism, Insurance, And Costly Solidarity Commitments1," CEPR Discussion Papers 14148, C.E.P.R. Discussion Papers.

    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tuf:tuftec:0831. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marcus Weir (email available below). General contact details of provider: http://ase.tufts.edu/economics .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.