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Health shocks and consumption smoothing in rural households: Does microcredit have a role to play?

Asadul Islam () and Pushkar Maitra ()

Journal of Development Economics, 2012, vol. 97, issue 2, 232-243

Abstract: This paper estimates, using a large panel data set from rural Bangladesh, the effects of health shocks on household consumption and how access to microcredit affects households’ response to such shocks. Households appear to be fairly well insured against health shocks. Our results suggest that households sell livestock in response to health shocks and short term insurance is therefore attained at a significant long term cost. However microcredit has a significant mitigating effect. Households that have access to microcredit do not need to sell livestock in order to insure consumption. Microcredit organizations and microcredit therefore have an insurance role to play, an aspect that has not been analyzed previously.

Keywords: Health shocks; Microcredit; Consumption; Insurance; Bangladesh (search for similar items in EconPapers)
JEL-codes: O12 I10 C23 (search for similar items in EconPapers)
Date: 2012
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Working Paper: HEALTH SHOCKS AND CONSUMPTION SMOOTHING IN RURAL HOUSEHOLDS: DOES MICROCREDIT HAVE A ROLE TO PLAY? (2008) Downloads
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