Consumption Smoothing and Insurance Against the Income Risks: A Case of India

Parmod Kumar and Sudhir Singh
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Parmod Kumar: Institute for Social and Economic Change, Bangalore, Postal: ADRTC, , Institute for Social and Economic Change, , Bangalore, , Karnataka,, India

Indian Economic Review, 2012, vol. 47, issue 2, 265-283

Abstract: This paper examines the incidence of consumption smoothing or risk sharing among the above and below poverty households in India. The results suggest partial risk sharing activities between households either within the same village or within their same ethnic groups. The results of insurance through same ethnic groups are more robust than that of village insurance. The results of insurance along the same caste line were found across the board whereas results for village insurance appeared in few cases. The implications of these results are quite significant. The findings of the paper indicate that various welfare programmes launched by the government to provide safety nets to the poor are not being targeted adequately as the poorest of the poor households remain the most vulnerable. The findings strengthen the case for improved targeting and making some provision for the public insurance for the households who lie at the bottom in the income bracket.

Keywords: Consumption smoothing; Risk sharing; Insurance; Above poverty; Below poverty; Antyodaya; Public distribution system (search for similar items in EconPapers)
JEL-codes: D81 D91 I38 (search for similar items in EconPapers)
Date: 2012
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