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Heterogeneity and Risk Sharing in Village Economies / Pierre-André Chiappori, Krislert Samphantharak, Sam Schulhofer-Wohl, Robert M. Townsend.
- Format:
- Book
- Author/Creator:
- Chiappori, Pierre-André.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w16696.
- NBER working paper series no. w16696
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2011.
- Summary:
- We measure heterogeneity in risk aversion among households in Thai villages using a full risk-sharing model and complement the results with a measure based on optimal portfolio choice. Among households with relatives living in the same village, full insurance cannot be rejected, suggesting that relatives provide something close to a complete-markets consumption allocation. There is substantial heterogeneity in risk preferences estimated from the full-insurance model, positively correlated in most villages with portfolio-choice estimates. The heterogeneity matters for policy: Although the average household would benefit from eliminating village-level risk, less-risk-averse households who are paid to absorb that risk would be worse off.
- Notes:
- Print version record
- January 2011.
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