The Formation of Risk Sharing Networks
(English) This paper examines the endogenous formation of risk sharing networks in the rural Philippines. We show that geographic proximity is a major determinant of interpersonal relationships. We find little evidence that people form relationships to pool income risk. The existence of a pre-existing relationship between two individuals is a major determinant of subsequent gifts and informal loans between them, controlling for other proximity factors. From this we conclude that these transfers and informal loans are embedded in interpersonal relationships. These relationships are largely determined by proximity factors and are only weakly the result of purposeful diversification of income risk. There is, however, some evidence that the formation of risk sharing links is aimed at pooling health risk. The paper also makes a methodological contribution to the estimation of dyadic models. _________________________________ (français) Cet article examine la façon dont se forment les réseaux informels de partage des risques à partir de données collectées aux Philippines. Nous trouvons que les ménages enquêtés choisissent des partenaires potentiels d'entraide géographiquement proches d'eux mais non économiquement distants d'eux. Nous trouvons également que l'existence d'un lien ex ante est un déterminant important des dons et prêts informels observés entre ménages. Nous concluons de ces résultats empiriques que les transactions observées entre ménages s'inscrivent dans le cadre de relations de voisinage dont l'objectif premier n'est pas la diversification des risques de revenu. En revanche, un partage des risques liés à la santé semble être à l'oeuvre. L'article fait une contribution méthodologique à travers l'estimation de modèles dyadiques.
|Date of creation:||Nov 2005|
|Contact details of provider:|| Postal: 4, rue d'Enghien, 75010 Paris|
Phone: + 33 1 53 24 14 50
Fax: + 33 1 53 24 14 51
Web page: http://www.dial.ird.fr/
More information through EDIRC
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.:
- Quisumbing, Agnes R., 1994.
"Intergenerational transfers in Philippine rice villages : Gender differences in traditional inheritance customs,"
Journal of Development Economics,
Elsevier, vol. 43(2), pages 167-195, April.
- Quisumbing, A.R., 1991. "Intergenerational Transfers in Philippine Rice Villages: Gender Differences in Traditional Inheritance Customs," Papers 632, Yale - Economic Growth Center.
- Rosenzweig, Mark R. & Stark, Oded, 1987.
"Consumption Smoothing, Migration and Marriage: Evidence from Rural India,"
7515, University of Minnesota, Economic Development Center.
- Rosenzweig, Mark R & Stark, Oded, 1989. "Consumption Smoothing, Migration, and Marriage: Evidence from Rural India," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 905-926, August.
- Pramila Krishnan & Stefan Dercon, 1997.
"In sickness and in health ... risk-sharing within households in rural Ethiopia,"
CSAE Working Paper Series
1997-12, Centre for the Study of African Economies, University of Oxford.
- Stefan Dercon & Pramila Krishnan, 2000. "In Sickness and in Health: Risk Sharing within Households in Rural Ethiopia," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 688-727, August.
- Timothy Conley & Udry Christopher, 2001. "Social Learning Through Networks: The Adoption of New Agricultural Technologies in Ghana," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 668-673.
- Ethan Ligon & Jonathan P. Thomas & Tim Worrall, 2000.
"Mutual Insurance, Individual Savings and Limited Commitment,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 3(2), pages 216-246, April.
- Ethan Ligon & Jonathan P. Thomas & Tim Worrall, 1998. "Mutual Insurance, Individual Savings and Limited Commitment," Keele Department of Economics Discussion Papers (1995-2001) 98/14, Department of Economics, Keele University.
- Stefan Dercon & Joachim de Weerdt, 2004.
"Risk-Sharing Networks And Insurance Against Illness,"
Development and Comp Systems
- De Weerdt, Joachim & Dercon, Stefan, 2006. "Risk-sharing networks and insurance against illness," Journal of Development Economics, Elsevier, vol. 81(2), pages 337-356, December.
- Stefan Dercon & Joachim De Weerdt, 2002. "Risk-sharing networks and insurance against illness," CSAE Working Paper Series 2002-16, Centre for the Study of African Economies, University of Oxford.
- Basu, Kaushik, 1986. "One Kind of Power," Oxford Economic Papers, Oxford University Press, vol. 38(2), pages 259-282, July.
- repec:oxf:wpaper:wps/2002-16 is not listed on IDEAS
- De Weerdt, Joachim, 2002. "Risk-Sharing and Endogenous Network Formation," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Marcel Fafchamps, 2006. "Development and social capital," Journal of Development Studies, Taylor & Francis Journals, vol. 42(7), pages 1180-1198.
- Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-685, May.
- Marcel Fafchamps & Susan Lund, 2000.
"Risk-Sharing Networks in Rural Philippines,"
Economics Series Working Papers
10, University of Oxford, Department of Economics.
- Mogues, Tewodaj & Carter, Michael R., 2004.
"Social Capital and the Reproduction of Inequality in Socially Polarized Economies,"
Staff Paper Series
476, University of Wisconsin, Agricultural and Applied Economics.
- Mogues, Tewodaj & Carter, Michael R., 2004. "Social Capital And The Reproduction Of Inequality In Socially Polarized Economies," 2004 Annual meeting, August 1-4, Denver, CO 20132, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Elizabeth Frankenberg & James P. Smith & Duncan Thomas, 2003.
"Economic Shocks, Wealth, and Welfare,"
Journal of Human Resources,
University of Wisconsin Press, vol. 38(2), pages -.
- Marcel Fafchamps, 2003. "Rural Poverty, Risk and Development," Books, Edward Elgar Publishing, number 3127.
- Sanjeev Goyal & Marco van der Leij & José Luis Moraga Gonzales, 2004.
"Economics: An Emerging Small World?,"
CESifo Working Paper Series
1287, CESifo Group Munich.
- Sanjeev Goyal & Marco van der Leij & José Luis Moraga-Gonzàlez, 2004. "Economics: An Emerging Small World?," Working Papers 2004.84, Fondazione Eni Enrico Mattei.
- Sanjeev Goyal & Marco van der Leij & Jose Luis Moraga, 2004. "Economics: An Emerging Small World?," Tinbergen Institute Discussion Papers 04-001/1, Tinbergen Institute.
- Rosenzweig, Mark R. & Wolpin, Kenneth I., 1988.
"Migration selectivity and the effects of public programs,"
Journal of Public Economics,
Elsevier, vol. 37(3), pages 265-289, December.
- Rosenzweig, Mark R. & Wolpin, Kenneth I., 1984. "Migration Selectivity and the Effects of Public Programs," Bulletins 8442, University of Minnesota, Economic Development Center.
- Townsend, Robert M, 1994.
"Risk and Insurance in Village India,"
Econometric Society, vol. 62(3), pages 539-591, May.
- Townsend, R.M., 1991. "Risk and Insurance in Village India," University of Chicago - Economics Research Center 91-3, Chicago - Economics Research Center.
- Robert M. Townsend, . "Risk and Insurance in Village India," University of Chicago - Population Research Center 91-3a, Chicago - Population Research Center.
- Binswanger, Hans P & McIntire, John, 1987. "Behavioral and Material Determinants of Production Relations in Land-Abundant Tropical Agriculture," Economic Development and Cultural Change, University of Chicago Press, vol. 36(1), pages 73-99, October.
- Glewwe, Paul & Hall, Gillette, 1998. "Are some groups more vulnerable to macroeconomic shocks than others? Hypothesis tests based on panel data from Peru," Journal of Development Economics, Elsevier, vol. 56(1), pages 181-206, June.
- Garance Genicot & Debraj Ray, 2003. "Group Formation in Risk-Sharing Arrangements," Review of Economic Studies, Oxford University Press, vol. 70(1), pages 87-113.
- Marcel Fafchamps & Marco J. van der Leij, 2006. "Scientific Networks and Co-authorship," Economics Series Working Papers 256, University of Oxford, Department of Economics.
- Coate, Stephen & Ravallion, Martin, 1993. "Reciprocity without commitment : Characterization and performance of informal insurance arrangements," Journal of Development Economics, Elsevier, vol. 40(1), pages 1-24, February.
- Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-918, October.
- Marcel Fafchamps & Flore Gubert, 2002.
"Contingent Loan Repayment in the Philippines,"
DT/2002/14, DIAL (Développement, Institutions et Mondialisation).
- Christopher Udry, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 495-526.
- Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
- Marcle Fafchamps, 1999. "Risk sharing and quasi-credit," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 8(3), pages 257-278.
When requesting a correction, please mention this item's handle: RePEc:dia:wpaper:dt200513. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Loic Le Pezennec)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.