RISK-SHARING NETWORKS AND INSURANCE AGAINST ILLNESS

Stefan Dercon and Joachim De Weerdt

Development and Comp Systems from University Library of Munich, Germany

Abstract: Most risk-sharing tests on developing country data are conducted at the level of the village; generally, the full risk-sharing hypothesis is rejected. This paper uses detailed data on all insurance networks within a village in Tanzania; networks are not clustered but largely overlapping. We test whether full risk-sharing occurs within these networks. We find that even within these smaller networks risk is not fully shared. In the event of a health shock, households reduce overall consumption: they cut back non-food consumption by roughly 30%, while protecting their food consumption.

Keywords: full insurance hypothesis; risk-sharing; networks and health shocks (search for similar items in EconPapers)
JEL-codes: D12 O12 O15 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2004-09-22
New Economics Papers: this item is included in nep-dev and nep-ias
Note: Type of Document - pdf; pages: 44
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Risk-sharing networks and insurance against illness (2006)
Working Paper: Risk-sharing networks and insurance against illness (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpdc:0409019

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