Testing Efficient Risk Sharing with Heterogeneous Risk Preferences: Comment

Aditya Shrinivas and Marcel Fafchamps

American Economic Review, 2018, vol. 108, issue 10, 3104-13

Abstract: Mazzocco and Saini (2012) propose and implement a test of efficient risk sharing that allows for preference heterogeneity. They motivate their approach as yielding different results from those of standard efficiency test with homogeneous preferences. We show that the standard efficiency test results are misreported in their paper and that the correctly reported results do not present as compelling a case for the importance of accounting for heterogeneous preferences.

JEL-codes: D12 D81 G22 O12 O18 R23 Z13 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/aer.20170413
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Citations: View citations in EconPapers (2)

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