Natural disasters and informal risk sharing against illness: networks vs. groups
Using original household panel survey data collected in rural Fiji, this paper demonstrates how informal risk-sharing institutions upon which poor people heavily rely in times of illness are vulnerable to natural disasters. First, household private cash-inkind transfers do not serve as insurance against illness in the relief phase (several months after the disaster); they do so only after pooled resources are recovered in the reconstruction phase (a few years later) (i.e., the resource effect). Second, risk-sharing arrangements are dependent on the history of labor-time transfers corresponding to housing damage: Only disaster non-victims are insured against illness, because victims have already received labor help for their rehabilitation from non-victims (i.e., the reciprocity effect). The paper also reveals that resource/reciprocity effects exist in endogenously formed networks and pre-formed groups, as risk-sharing pools to a similar degree. Not only do private transfers exchanged among households serve as insurance, but also, household contributions directly made to groups ? such as ritual gifts and religious donations ? contain risk- sharing components against illness among group members. Although the former finding is commonly evident in the literature, the latter is new. Network formation is directly related to pre-formed groups, especially kin and religious ones.
|Date of creation:||Jul 2010|
|Date of revision:|
|Contact details of provider:|| Postal: 1-1-1 Tennodai, Tsukuba, Ibaraki 305-8571|
Web page: http://www.econ.tsukuba.ac.jp/
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.:
- Stefan Dercon & Joachim de Weerdt, 2004.
"Risk-Sharing Networks And Insurance Against Illness,"
Development and Comp Systems
- De Weerdt, Joachim & Dercon, Stefan, 2006. "Risk-sharing networks and insurance against illness," Journal of Development Economics, Elsevier, vol. 81(2), pages 337-356, December.
- Stefan Dercon & Joachim De Weerdt, 2002. "Risk-sharing Networks and Insurance against illness," Economics Series Working Papers WPS/2002-16, University of Oxford, Department of Economics.
- Stefan Dercon & Joachim De Weerdt, 2002. "Risk-sharing networks and insurance against illness," CSAE Working Paper Series 2002-16, Centre for the Study of African Economies, University of Oxford.
When requesting a correction, please mention this item's handle: RePEc:tsu:tewpjp:2010-006. 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: (Yoshinori Kurokawa)
If references are entirely missing, you can add them using this form.