A Novel Analysis of Risk Sharing Effects on Income Inequality in Informal Insurances

Mani Motameni ()

Iranian Economic Review (IER), 2017, vol. 21, issue 2, 230-240

Abstract: This study aims to demonstrate that joining in risk sharing network leads to the reduction in incomes volatility. In this respect, income variance for a group of members in an informal insurance is modelled in which income variance prior to joining risk sharing network and after joining is analyzed statistically. A Monte Carlo simulation technique is used to prove the result. To extend and analyze the sensitivity, a simulation is performed on either small size population or large size population, the probability of occurrence and the amount of loss are also repeated in all levels. The result of study shows that joining to risk sharing network significantly decreases the income volatility. It is also proved that the probability of occurrence and the amount of loss positively affect the intensity of income volatility.

Keywords: Risk Sharing; Income Inequality; Informal Insurance. (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
ftp://80.66.179.253/eut/journl/20172-3.pdf (application/pdf)

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:eut:journl:v:21:y:2017:i:2:p:230

Access Statistics for this article

Iranian Economic Review (IER) is currently edited by Dr.Hossien Abbasinejad

More articles in Iranian Economic Review (IER) from Faculty of Economics,University of Tehran.Tehran,Iran Contact information at EDIRC.
Bibliographic data for series maintained by [z.rahimalipour] ().