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How do the poor cope with hardships when mutual assistance is unavailable?

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  • Masahiro Shoji

    () (University of Tokyo)

Abstract

This paper investigates how risk coping strategies differ between idiosyncratic and covariate income shocks using evidence from a nation-wide flood in Bangladesh. It is found that availability of coping strategies significantly depends on the covariate-idiosyncratic characteristic of shocks. The main strategies for idiosyncratic and moderate covariate shocks are interest-free informal credit and additional labor supply for fishing, but they are not utilized to cope with the severe covariate shocks. Instead, people must resort to borrowing with high interest as a last resort.

Suggested Citation

  • Masahiro Shoji, 2008. "How do the poor cope with hardships when mutual assistance is unavailable?," Economics Bulletin, AccessEcon, vol. 15(13), pages 1-17.
  • Handle: RePEc:ebl:ecbull:eb-08o10015
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    References listed on IDEAS

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    15. repec:dau:papers:123456789/4392 is not listed on IDEAS
    16. Udry, Christopher, 1995. "Risk and Saving in Northern Nigeria," American Economic Review, American Economic Association, vol. 85(5), pages 1287-1300, December.
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    Cited by:

    1. Shoji, Masahiro, 2017. "Religious Fractionalisation and Crimes in Disaster-Affected Communities: Survey Evidence from Bangladesh," MPRA Paper 78702, University Library of Munich, Germany.

    More about this item

    Keywords

    South Asia;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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