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Risk Sharing and Network Formation

Gubert, Flore; Fafchamps, Marcel (2007), Risk Sharing and Network Formation, The American Economic Review, 97, 2, p. 75-79. http://dx.doi.org/10.1257/aer.97.2.75

Type
Article accepté pour publication ou publié
Date
2007-05
Journal name
The American Economic Review
Volume
97
Number
2
Publisher
American Economic Association
Pages
75-79
Publication identifier
Metadata
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Author(s)
Gubert, Flore
Fafchamps, Marcel
Abstract (EN)
In this article the authors examine the motivation behind the formation of risk pools. They do so by using as suitable study data survey information collected among the rural poor of the Philippines. They discuss the possibility that network formation comes as the result of an attempt to maximize gains derived from shared risk to income within a social group. They note that the most significant benefits of pooled risk occur when individuals are of different occupations and there is a variety of risks faced.
Subjects / Keywords
Philippines; Risk management in business; income; management; social networks; social groups; rural poor; income
JEL
O15 - Human Resources; Human Development; Income Distribution; Migration
O18 - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
O53 - Asia including Middle East
D85 - Network Formation and Analysis: Theory
D81 - Criteria for Decision-Making under Risk and Uncertainty