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Group Size and the Efficiency of Informal Risk Sharing

Fitzsimons, Emla, Malde, Bansi, Vera-Hernandez, Marcos (2018) Group Size and the Efficiency of Informal Risk Sharing. Economic Journal, 128 (612). F575-F608. ISSN 0013-0133. E-ISSN 1468-0297. (doi:10.1111/ecoj.12565) (KAR id:64985)

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http://dx.doi.org/10.1111/ecoj.12565

Abstract

This paper studies the relationship between group size and informal risk sharing. It shows that under limited commitment with coalitional deviations, this relationship is theoretically ambiguous. It investigates this question empirically using data on sibship size of household heads and spouses from rural Malawi, exploiting a social norm among the main sample ethnic group to define the potential risk sharing group. We uncover evidence of worse risk sharing of crop losses in larger potential risk sharing groups, and rule out alternative explanations for the findings. A simple calibration exercise indicates that our empirical findings are consistent with the theory.

Item Type: Article
DOI/Identification number: 10.1111/ecoj.12565
Uncontrolled keywords: Group size, coalitional deviations, informal risk sharing, extended family networks JEL Classification: D14, O1, O12
Subjects: H Social Sciences
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: Bansi Malde
Date Deposited: 05 Dec 2017 12:39 UTC
Last Modified: 06 Feb 2020 04:17 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/64985 (The current URI for this page, for reference purposes)
Malde, Bansi: https://orcid.org/0000-0003-1323-3383
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