Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution

William Jack and Tavneet Suri

American Economic Review, 2014, vol. 104, issue 1, 183-223

Abstract: We explore the impact of reduced transaction costs on risk sharing by estimating the effects of a mobile money innovation on consumption. In our panel sample, adoption of the innovation increased from 43 to 70 percent. We find that, while shocks reduce consumption by 7 percent for nonusers, the consumption of user households is unaffected. The mechanisms underlying these consumption effects are increases in remittances received and the diversity of senders. We report robustness checks supporting these results and use the four-fold expansion of the mobile money agent network as a source of exogenous variation in access to the innovation.

JEL-codes: E42 G22 O16 O17 Z13 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.1.183
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (432)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.104.1.183 (application/pdf)
http://www.aeaweb.org/aer/data/jan2014/20111526_app.pdf (application/pdf)
http://www.aeaweb.org/aer/data/jan2014/20111526_data.zip (application/zip)
http://www.aeaweb.org/aer/ds/jan2014/20111526_ds.zip (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:104:y:2014:i:1:p:183-223

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().