Risk Pooling between Households and Risk-Coping Measures in Developing Countries: Evidence from Rural Bangladesh
Using data from rural Bangladesh, I test whether income risks are pooled among villagers, between neighboring households, and between related households living in different villages. I find evidence that risks to food consumption are pooled between neighboring households and between related households but not among villagers. As for nonfood consumption, I find little evidence of risk pooling except between unrelated neighboring households. I also find that, while households belonging to a neighborhood network do not take any special measures during an economic hardship, those not belonging to any such network try to smooth consumption by selling off livestock and other assets and by getting interest-free loans. Negative income shocks are found to have little effect on labor supply or private transfers.
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- Jalan, Jyotsna & Ravallion, Martin, 1999.
"Are the poor less well insured? Evidence on vulnerability to income risk in rural China,"
Journal of Development Economics,
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- Jalan, Jyotsna & Ravallion, Martin, 1997. "Are the poor less well-insured? Evidence on vulnerability to income risk in rural China," Policy Research Working Paper Series 1863, The World Bank.
- Grimard, Franque, 1997. "Household consumption smoothing through ethnic ties: evidence from Cote d'Ivoire," Journal of Development Economics, Elsevier, vol. 53(2), pages 391-422, August.
- Firman Witoelar, 2005. "Inter-household Allocations within Extended Family: Evidence from the Indonesia Family Life Survey," Working Papers 912, Economic Growth Center, Yale University.
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