Testing Efficient Risk Sharing with Heterogeneous Risk Preferences

• 成果类型: Article
• 署名作者: Mazzocco, Maurizio; Saini, Shiv
• 署名单位: University of California System; University of California Los Angeles; Cornerstone Research
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.102.1.428
• 发表日期: 2012
• 页码: 428-468
• 关键词: rejective multiple test; full insurance; village; INDIA

摘要

We propose a method that enables one to test efficient risk sharing even when households have different risk preferences. The method is composed of three tests. The first one determines whether in the data households have homogeneous risk preferences. The second and third tests evaluate efficient risk sharing when the hypothesis of homogeneous risk preferences is rejected. We use this method to test efficient risk sharing in rural India. Using the first test, we strongly reject the hypothesis of identical risk preferences. Using the second and third tests, we reject efficiency at the village but not at the caste level.