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The Impact of Kinship Networks on the Adoption of Risk-Mitigating Strategies in Ethiopia

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  • Di Falco, Salvatore
  • Bulte, Erwin

Abstract

The adoption of certain farm management practices, such as tree planting and soil and water conservation, can reduce exposure to weather shocks. However, in many countries the adoption of such risk mitigating measures is far from complete. We explore how risk-sharing networks in the form of kinship, characterized by the moral imperative of within-group sharing, affects the adoption of risk mitigating activities in rural Ethiopia. We find suggestive evidence that compulsory sharing invites free riding and attenuates incentives for self-protection against weather shocks. We also find evidence of the existence of a possible substitution effect between credit and social networks.

Suggested Citation

  • Di Falco, Salvatore & Bulte, Erwin, 2013. "The Impact of Kinship Networks on the Adoption of Risk-Mitigating Strategies in Ethiopia," World Development, Elsevier, vol. 43(C), pages 100-110.
  • Handle: RePEc:eee:wdevel:v:43:y:2013:i:c:p:100-110
    DOI: 10.1016/j.worlddev.2012.10.011
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    Cited by:

    1. Ayenew, Habtamu Yesigat & Sauer, Johannes & Abate-Kassa, Getachew, 2015. "Expossure To Risk And Risk Management In Smallholder Agriculture," 55th Annual Conference, Giessen, Germany, September 23-25, 2015 209211, German Association of Agricultural Economists (GEWISOLA).
    2. Tankari, Mahamadou Roufahi, 4. "Action Levers For A Sustainable Farmland Management In Niger," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3(4).
    3. Tesfamicheal Wossen & Salvatore Falco & Thomas Berger & William McClain, 2016. "You are not alone: social capital and risk exposure in rural Ethiopia," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(4), pages 799-813, August.
    4. Ngigi, Marther W. & Mueller, Ulrike & Birner, Regina, 2016. "Gender differences in climate change perceptions and adaptation strategies: an intra-household analysis from rural Kenya," Discussion Papers 232900, University of Bonn, Center for Development Research (ZEF).
    5. Bulte, Erwin & Wang, Ruixin & Zhang, Xiaobo, 2017. "Forced gifts: The burden of being a friend," IFPRI discussion papers 1615, International Food Policy Research Institute (IFPRI).
    6. Kazianga, Harounan & Wahhaj, Zaki, 2017. "Intra-household resource allocation and familial ties," Journal of Development Economics, Elsevier, vol. 127(C), pages 109-132.
    7. Coromaldi, Manuela & Pallante, Giacomo & Savastano, Sara, 2015. "Adoption of modern varieties, farmers' welfare and crop biodiversity: Evidence from Uganda," Ecological Economics, Elsevier, vol. 119(C), pages 346-358.
    8. Grimm, Michael & Hartwig, Renate & Lay, Jann, 2013. "Does Forced Solidarity Hamper Investment in Small and Micro Enterprises?," IZA Discussion Papers 7229, Institute for the Study of Labor (IZA).
    9. Tessema, Yohannis Mulu & Asafu-Adjaye, John & Kassie, Menale & Mallawaarachchi, Thilak, 2016. "Do neighbours matter in technology adoption? The case of conservation tillage in northwest Ethiopia," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 11(3), September.
    10. Songsermsawas, Tisorn & Baylis, Kathy & Chhatre, Ashwini & Michelson, Hope, 2016. "Can Peers Improve Agricultural Revenue?," World Development, Elsevier, vol. 83(C), pages 163-178.
    11. Takahashi, Kazushi & Ikegami, Munenobu & Sheahan, Megan & Barrett, Christopher B., 2016. "Experimental Evidence on the Drivers of Index-Based Livestock Insurance Demand in Southern Ethiopia," World Development, Elsevier, vol. 78(C), pages 324-340.
    12. repec:eee:jcecon:v:45:y:2017:i:4:p:827-846 is not listed on IDEAS
    13. Arslan, Aslihan & Belotti, Federico & Lipper, Leslie, 2017. "Smallholder productivity and weather shocks: Adoption and impact of widely promoted agricultural practices in Tanzania," Food Policy, Elsevier, vol. 69(C), pages 68-81.
    14. Alger, Ingela & Juarez, Laura & Juarez-Torres, Miriam & Miquel-Florensa, Josepa, 2016. "Does informal risk sharing induce lower efforts? Evidence from lab-in-the-field experiments in rural Mexico," TSE Working Papers 16-623, Toulouse School of Economics (TSE), revised Oct 2016.
    15. Kikulwe, Enoch M. & Fischer, Elisabeth & Qaim, Matin, 2013. "Mobile money, market transactions, and household income in rural Kenya," Discussion Papers 155847, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    16. Meinzen-Dick, Ruth Suseela & Bernier, Quinn & Haglund, Eric, 2013. "The six "ins" of climate-smart agriculture: Inclusive institutions for information, innovation, investment, and insurance:," CAPRi working papers 114, International Food Policy Research Institute (IFPRI).
    17. Jaimovich, Dany, 2015. "Missing Links, Missing Markets: Evidence of the Transformation Process in the Economic Networks of Gambian Villages," World Development, Elsevier, vol. 66(C), pages 645-664.
    18. Mequaninte, Teferi & Birner, Regina & Mueller, Ulrike, 2015. "Adoption of Land Management Practices in Ethiopia: Which Network Types," 2015 Conference, August 9-14, 2015, Milan, Italy 212631, International Association of Agricultural Economists.
    19. repec:eee:wdevel:v:99:y:2017:i:c:p:1-14 is not listed on IDEAS
    20. Tesfamicheal Wossen & Thomas Berger & Salvatore Di Falco, 2015. "Social capital, risk preference and adoption of improved farm land management practices in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 46(1), pages 81-97, January.

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    Keywords

    kinship; compulsory sharing; drought; flood; Ethiopia; Africa;

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