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Insurance and Investment within Family Networks

Author

Listed:
  • Manuela Angelucci
  • Giacomo de Giorgi
  • Imran Rasul
  • Marcos A. Rangel

Abstract

In this paper family networks affecting informal insurance and investment is being studied. Panel data from the randomized evaluation of PROGRESA in rural Mexico and the information on surnames of household heads and their spouses to identify extended families have been used. Members of an extended family: 1) share risk with each other but not with households without relatives in the village; 2) invest more in their children's human capital when hit by positive income shocks, and disinvest less when hit by negative shock, and 3) have a higher long-term increase in capital, income, and consumption than households without relatives in the village. [Working Paper No. 260]

Suggested Citation

  • Manuela Angelucci & Giacomo de Giorgi & Imran Rasul & Marcos A. Rangel, 2010. "Insurance and Investment within Family Networks," Working Papers id:2649, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:2649
    Note: Institutional Papers
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    References listed on IDEAS

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    1. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1992. "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," American Economic Review, American Economic Association, vol. 82(5), pages 1177-1198, December.
    2. Pedro Albarran & Orazio P. Attanasio, 2003. "Limited Commitment and Crowding out of Private Transfers: Evidence from a Randomised Experiment," Economic Journal, Royal Economic Society, vol. 113(486), pages 77-85, March.
    3. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1997. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1121-1166, December.
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    Cited by:

    1. Meghir, Costas & Pistaferri, Luigi, 2011. "Earnings, Consumption and Life Cycle Choices," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 9, pages 773-854, Elsevier.
    2. Belhaj, Mohamed & Deroïan, Frédéric, 2012. "Risk taking under heterogenous revenue sharing," Journal of Development Economics, Elsevier, vol. 98(2), pages 192-202.
    3. Oriana Bandiera & Robin Burgess & Selim Gulesci & Imran Rasul, 2009. "Community Networks and PovertyReductionProgrammes: Evidence from Bangladesh," STICERD - Economic Organisation and Public Policy Discussion Papers Series 015, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    4. Stephane, Victor, 2021. "Hiding behind the veil of ashes: Social capital in the wake of natural disasters," World Development, Elsevier, vol. 145(C).
    5. Ciro Avitabile, 2011. "Spillover Effects in Healthcare Programs: Evidence on Social Norms and Information Sharing," CSEF Working Papers 271, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 14 Mar 2011.
    6. DELPIERRE Matthieu & VERHEYDEN Bertrand & WEYNANTS Stéphanie, 2011. "On the interaction between risk-taking and risk-sharing under farm household wealth heterogeneity," LISER Working Paper Series 2011-35, Luxembourg Institute of Socio-Economic Research (LISER).
    7. Krislert Samphantharak & Robert M. Townsend, 2018. "Risk and Return in Village Economies," American Economic Journal: Microeconomics, American Economic Association, vol. 10(1), pages 1-40, February.
    8. Emla Fitzsimons & Bansi Malde, 2014. "Empirically probing the quantity–quality model," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(1), pages 33-68, January.
    9. Rita Ginja, 2010. "Income Shocks and Investments in Human Capital," 2010 Meeting Papers 1165, Society for Economic Dynamics.
    10. Giacomo De Giorgi & Luca Gambetti, 2012. "Consumption Heterogeneity over the Business Cycle," Working Papers 646, Barcelona School of Economics.

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    Keywords

    extended family networks; investment; risk-sharing;
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