Risk Pooling, Risk Preferences, and Social Networks

Orazio Attanasio, Abigail Barr, Juan-Camilo Cardenas, Garance Genicot and Costas Meghir

American Economic Journal: Applied Economics, 2012, vol. 4, issue 2, 134-67

Abstract: Using data from an experiment conducted in 70 Colombian communities, we investigate who pools risk with whom when trust is crucial for enforcing risk pooling arrangements. We explore the roles played by risk attitudes and social networks. Both empirically and theoretically, we find that close friends and relatives group assortatively on risk attitudes and are more likely to join the same risk pooling group, while unfamiliar participants group less and rarely assort. These findings indicate that where there are advantages to grouping assortatively on risk attitudes those advantages may be inaccessible when trust is absent or low. (JEL C93, O12, O18, Z13)

JEL-codes: C93 O12 O18 Z13 (search for similar items in EconPapers)
Date: 2012
Note: DOI: 10.1257/app.4.2.134
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Citations: View citations in EconPapers (110)

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Related works:
Working Paper: Risk Pooling, Risk Preferences, and Social Networks (2011)
Working Paper: Risk Pooling, Risk preferences, and Social Networks (2009)
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