Liquidity Profiles of Poor Mexican Households
Summary Buffer stock savings theories predict that more vulnerable households build up liquid savings in order to cope with income variability. Using data from 1801 marginalized Mexican households, this paper examines how household liquidity levels vary by income level and use of banking. The paper finds strong evidence of buffer stock savings in poor and vulnerable households. It also shows that membership in a financial cooperative is a determinant of higher household liquidity levels. Financial instruments are used more to confront idiosyncratic shocks than systemic shocks. Idiosyncratic shocks and remittances are important determinants of liquidity levels in unbanked households.
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.:
- Banerjee, Abhijit & Duflo, Esther, 2006.
"The Economic Lives of the Poor,"
CEPR Discussion Papers
5968, C.E.P.R. Discussion Papers.
- Modigliani, Franco, 1985.
"Life Cycle, Individual Thrift and the Wealth of Nations,"
Nobel Prize in Economics documents
1985-1, Nobel Prize Committee.
- Modigliani, Franco, 1986. "Life Cycle, Individual Thrift, and the Wealth of Nations," American Economic Review, American Economic Association, vol. 76(3), pages 297-313, June.
- Julia Paxton, 2009. "Subsistence Savings Strategies of Male- and Female-Headed Households: Evidence from Mexico," Eastern Economic Journal, Palgrave Macmillan, vol. 35(2), pages 209-231.
- Imran Matin & David Hulme & Stuart Rutherford, 2002. "Finance for the poor: from microcredit to microfinancial services," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(2), pages 273-294.
- Jonathan Morduch, 1995.
"Income Smoothing and Consumption Smoothing,"
Journal of Economic Perspectives,
American Economic Association, vol. 9(3), pages 103-114, Summer.
- Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Harvard Institute of Economic Research Working Papers 1727, Harvard - Institute of Economic Research.
- Morduch, J., 1995. "Income Smoothing and Consumption Smoothing," Papers 512, Harvard - Institute for International Development.
- Dean Karlan & Nava Ashaf & Wesley Yin, 2004.
"Tying odysseus to the mast: Evidence from a commitment savings product in the philippines,"
Natural Field Experiments
00206, The Field Experiments Website.
- Nava Ashraf & Dean Karlan & Wesley Yin, 2006. "Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines," The Quarterly Journal of Economics, MIT Press, vol. 121(2), pages 635-672, May.
- Christopher D. Carroll, 1992. "The Buffer-Stock Theory of Saving: Some Macroeconomic Evidence," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(2), pages 61-156.
- Morduch, Jonathan, 1994.
"Poverty and Vulnerability,"
American Economic Review,
American Economic Association, vol. 84(2), pages 221-25, May.
- Jeong-Joon Lee & Yasuyuki Sawada, 2005.
"Precautionary Saving under LiquidityConstraints: Evidence from Rural Pakistan,"
CIRJE-F-377, CIRJE, Faculty of Economics, University of Tokyo.
- Lee, Jeong-Joon & Sawada, Yasuyuki, 2010. "Precautionary saving under liquidity constraints: Evidence from rural Pakistan," Journal of Development Economics, Elsevier, vol. 91(1), pages 77-86, January.
- Gourinchas, Pierre-Olivier & Parker, Jonathan A, 2000.
"Consumption Over the Life-Cycle,"
CEPR Discussion Papers
2345, C.E.P.R. Discussion Papers.
- Paxson, Christina H, 1992. "Using Weather Variability to Estimate the Response of Savings to Transitory Income in Thailand," American Economic Review, American Economic Association, vol. 82(1), pages 15-33, March.
- Christopher D. Carroll & Andrew A. Samwick, 1993.
"How important is precautionary saving?,"
Working Paper Series / Economic Activity Section
145, Board of Governors of the Federal Reserve System (U.S.).
- George-Marios Angeletos, 2001. "The Hyberbolic Consumption Model: Calibration, Simulation, and Empirical Evaluation," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 47-68, Summer.
- Deaton, Angus, 1992. "Understanding Consumption," OUP Catalogue, Oxford University Press, number 9780198288244, March.
- Hubbard, R Glenn & Skinner, Jonathan & Zeldes, Stephen P, 1994. "Expanding the Life-Cycle Model: Precautionary Saving and Public Policy," American Economic Review, American Economic Association, vol. 84(2), pages 174-79, May.
When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:39:y:2011:i:4:p:600-610. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.