Now or later? The allocation of the pot and the insurance motive in fixed roscas

• 成果类型: Article
• 署名作者: Baland, Jean-Marie; Guirkinger, Catherine; Hartwig, Renate
• 署名单位: University of Namur; University of Passau
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2019.04.001
• 发表日期: 2019
• 页码: 1-11
• 关键词: insurance; RISK; Roscas

摘要

We start from the observation that, in fixed roscas in Sub-Saharan African, members often prefer to take the last turn. We argue that, when exchanges of turns are allowed during a cycle, a late turn allows to request the pot when an urgent need arises. Survey data indicate that insurance needs are critical in determining the preferred position of rosca members. We develop a theoretical model to formalize the argument and show that the preference for the last position requires that the probability of a shock is neither too low nor too high. We test this prediction in a lab-in-the-field experiment and confirm that the preference for being last is non-monotonic in the risk of negative shocks.