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The Economics of Roscas and Intra-Household Resource Allocation

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  • Siwan Anderson

    (Tilburg University)

Abstract

This paper investigates individual motives to participate in rotating savings and credit associations (roscas). Detailed evidence of roscas in a Kenyan slum (Nairobi) shows that most roscas are predominantly composed of women. To explain this phenomenon, we propose an argument based on conflictual interactions within the household, where husbands and wives have differential savings patterns due to different valuations of an indivisible good. We test the empirical implications of the model using data collected from the Kenyan slum.

Suggested Citation

  • Siwan Anderson, 2000. "The Economics of Roscas and Intra-Household Resource Allocation," Econometric Society World Congress 2000 Contributed Papers 1323, Econometric Society.
    • Handle: RePEc:ecm:wc2000:1323
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    References listed on IDEAS

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    1. repec:adr:anecst:y:1993:i:29:p:07 is not listed on IDEAS
    2. Hoddinott, John & Haddad, Lawrence, 1995. "Does Female Income Share Influence Household Expenditures? Evidence from Cote d'Ivoire," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 77-96, February.
    3. Kovsted, Jens & Lyk-Jensen, Peter, 1999. "Rotating savings and credit associations: the choice between random and bidding allocation of funds," Journal of Development Economics, Elsevier, vol. 60(1), pages 143-172, October.
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    7. Besley, Timothy & Levenson, Alec R, 1996. "The Role of Informal Finance in Household Capital Accumulation: Evidence from Taiwan," Economic Journal, Royal Economic Society, vol. 106(434), pages 39-59, January.
    8. Handa, Sudhanshu & Kirton, Claremont, 1999. "The economics of rotating savings and credit associations: evidence from the Jamaican 'Partner'," Journal of Development Economics, Elsevier, vol. 60(1), pages 173-194, October.
    9. Levenson, Alec R. & Besley, Timothy, 1996. "The anatomy of an informal financial market: Rosca participation in Taiwan," Journal of Development Economics, Elsevier, vol. 51(1), pages 45-68, October.
    10. Timothy Besley & Stephen Coate & Glenn Loury, 1994. "Rotating Savings and Credit Associations, Credit Markets and Efficiency," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(4), pages 701-719.
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    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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