Informal insurance arrangements with limited commitment: Theory and evidence from village economies

• 成果类型: Article
• 署名作者: Ligon, E; Thomas, JP; Worrall, T
• 署名单位: University of California System; University of California Berkeley; University of St Andrews; Keele University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1111/1467-937X.00204
• 发表日期: 2002
• 页码: 209-244
• 关键词: credit markets; Sovereign debt; RISK; BEHAVIOR; equilibrium

摘要

Recent work on consumption allocations in village economics finds that idiosyncratic variation in consumption is systematically related to idiosyncratic variation in income, thus rejecting the hypothesis of full risk-pooling. We attempt to explain these observations by adding limited commitment as an impediment to risk-pooling. We provide a general dynamic model and completely characterise efficient informal insurance arrangements constrained by limited commitment, and test the model using data from three Indian villages, We find that the model can fully explain the dynamic response of consumption to income, but that it fails to explain the distribution of consumption across households.