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A Two-Tiered Demographic System: "Insiders" and "Outsiders" in Three Swabian Communities, 1558-1914

Author

Listed:
  • Guinnane, Timothy W.

    (Yale University)

  • Ogilvie, Sheilagh C.

    (University of Cambridge)

Abstract

The investment decisions of small-scale farmers in developing countries are conditioned by their financial environment. Binding credit market constraints and incomplete insurance can reduce investment in activities with high expected profits. We conducted several experiments in northern Ghana in which farmers were randomly assigned to receive cash grants, grants of or opportunities to purchase rainfall index insurance, or a combination of the two. Demand for index insurance is strong, and insurance leads to significantly larger agricultural investment and riskier production choices in agriculture. The salient constraint to farmer investment is uninsured risk: when provided with insurance against the primary catastrophic risk they face, farmers are able to find resources to increase expenditure on their farms. Demand for insurance in subsequent years is strongly increasing in a farmer's own receipt of insurance payouts, and with the receipt of payouts by others in the farmer's social network. Both investment patterns and the demand for index insurance are consistent with the presence of important basis risk associated with the index insurance, and with imperfect trust that promised payouts will be delivered.

Suggested Citation

  • Guinnane, Timothy W. & Ogilvie, Sheilagh C., 2013. "A Two-Tiered Demographic System: "Insiders" and "Outsiders" in Three Swabian Communities, 1558-1914," Working Papers 112, Yale University, Department of Economics.
    • Handle: RePEc:ecl:yaleco:112
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    References listed on IDEAS

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    7. Ogilvie, S. & Küpker, M. & Maegraith, J., 2009. "Community Characteristics and Demographic Development: Three Württemberg Communities, 1558 - 1914," Cambridge Working Papers in Economics 0910, Faculty of Economics, University of Cambridge.
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    Cited by:

    1. Ogilvie, Sheilagh & Edwards, Jeremy & Küpker, Markus, 2022. "Economically relevant human capital or multi-purpose consumption good? Book ownership in pre-modern Württemberg," Explorations in Economic History, Elsevier, vol. 83(C).
    2. Sheilagh Ogilvie & Markus Küpker, 2015. "Human Capital Investment in a Late-Developing Economy: Evidence from Württemberg, c. 1600 – c. 1900," Cambridge Working Papers in Economics 1528, Faculty of Economics, University of Cambridge.

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    More about this item

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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