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Ethnicity and risk sharing network formation: Evidence from rural Viet Nam

Author

Listed:
  • Hoang

    (PSL, Université Paris-Dauphine, Paris, France, UMR 225 DIAL, Institut de Recherche pour le Développement (IRD), Paris, France)

  • Laure Pasquier-Doumer

    (IRD, UMR DIAL, PSL, Université Paris-Dauphine)

  • Camille Saint-Macary

    (IRD, UMR DIAL, PSL, Université Paris-Dauphine)

Abstract

Ethnic inequality remains a persistent challenge for Viet Nam. This paper aims at better understanding this ethnic gap through exploring the formation of risk sharing networks in rural areas. It first investigates the differences in risk sharing networks between the ethnic minorities and the Kinh majority, in terms of size and similarity attributes of the networks. Second, it relies on the concept of ethnic homophily in link formation to explain the mechanisms leading to those differences. In particular, it disentangles the effect of demographic and local distribution of ethnic groups on risk-sharing network formation from cultural and social distance between ethnic groups, while controlling for the disparities in the geographical environment. Results show that ethnic minorities have smaller and less diversified networks than the majority. This is partly explained by differences in wealth and in the geographical environment. But ethnicity also plays a direct role in risk-sharing network formation through the combination of preferences to form a link with people from the same ethnic group (inbreeding homophily) and the relative size of ethnic groups conditioning the opportunities to form a link (baseline homophily). Inbreeding homophily is found to be stronger among the Kinh majority, leading to the exclusion of ethnic minorities from Kinh networks, which are supposed to be more efficient to cope with covariant risk because they are more diversified in the occupation and location of their members. This evidence suggests that inequalities among ethnic groups in Viet Nam are partly rooted in the cultural and social distances between them.

Suggested Citation

  • Hoang & Laure Pasquier-Doumer & Camille Saint-Macary, 2018. "Ethnicity and risk sharing network formation: Evidence from rural Viet Nam," Working Papers DT/2018/15, DIAL (Développement, Institutions et Mondialisation).
  • Handle: RePEc:dia:wpaper:dt201815
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    More about this item

    Keywords

    Risk-sharing network; homophily; ethnic gap; Viet Nam; Vietnam.;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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