Alernative Forms for Restricted Regressions
We study the relationship between group size and the extent of risk sharing in an insurance game played over a number of periods with random idiosyncratic and aggregate shocks to income in each period. Risk sharing is attained via agents that receive a high endowment in one period making unilateral transfers to agents that receive a low endowment in that period. The complete risk sharing allocation is for all agents to place their endowments in a common pool, which is then shared equally among members of the group in every period. Theoretically, the larger the group size, the smaller the per capita dispersion in consumption and greater is the potential value of insurance. Field evidence however suggests that smaller groups do better than larger groups as far as risk sharing is concerned. Results from our experiments show that the extent of mutual insurance is significantly higher in smaller groups, though contributions to the pool are never close to what complete risk sharing requires.
|Date of creation:||2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +61 3 8344 5355
Fax: +61 3 8344 6899
Web page: http://fbe.unimelb.edu.au/economics
More information through EDIRC
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.:
- Suits, Daniel B, 1984. "Dummy Variables: Mechanics v. Interpretation," The Review of Economics and Statistics, MIT Press, vol. 66(1), pages 177-80, February.
- Christensen, Laurits R & Greene, William H, 1976. "Economies of Scale in U.S. Electric Power Generation," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 655-76, August.
- Griffiths, William E. & O'Donnell, Christopher J. & Cruz, Agustina Tan, 1999.
"Imposing Regularity Conditions On A System Of Cost And Factor Share Equations,"
12925, University of New England, School of Economics.
- Griffiths, William E. & O'Donnell, Christopher J. & Cruz, Agustina Tan, 2000. "Imposing regularity conditions on a system of cost and factor share equations," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(1), March.
- Greene, William H & Seaks, Terry G, 1991. "The Restricted Least Squares Estimator: A Pedagogical Note," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 563-67, August.
- Suits, Daniel B & Mason, Andrew & Chan, Louis, 1978. "Spline Functions Fitted by Standard Regression Methods," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 132-39, February.
- Huang, Kuo S & Haidacher, Richard C, 1983. "Estimation of a Composite Food Demand System for the United States," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(4), pages 285-91, October.
- Bing-Huei Lin, 2002. "Fitting term structure of interest rates using B-splines: the case of Taiwanese Government bonds," Applied Financial Economics, Taylor & Francis Journals, vol. 12(1), pages 57-75.
- Dallas S. Batten & Daniel L. Thornton, 1983. "Polynomial distributed lags and the estimation of the St. Louis equation," Review, Federal Reserve Bank of St. Louis, issue Apr, pages 13-25.
- Byron, R P, 1982. "A Note on the Estimation of Symmetric Systems," Econometrica, Econometric Society, vol. 50(6), pages 1573-75, November.
When requesting a correction, please mention this item's handle: RePEc:mlb:wpaper:954. 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: (Katherine Perez)
If references are entirely missing, you can add them using this form.