Financial Shock-Coping in Rural Thailand and Vietnam

Niels Kemper, Rainer Klump, Lukas Menkhoff and Ornsiri Rungruxsirivorn

Chapter 10 in Vulnerability to Poverty, 2013, pp 258-282 from Palgrave Macmillan

Abstract: Abstract This research examines financial decision-making not from the perspective of the ordinary but from the extraordinary. Shocks are extraordinary. Events such as excessive rainfall or drought, illness or death of a household member have the potential to dramatically impair household income streams. Shocks to income are shocks to consumption unless households manage to mitigate or avoid the reduction in consumption through the choice of an appropriate smoothing mechanism. Affected households take such measures under the commonly employed assumption that households prefer smooth over fluctuating consumption (due to risk aversion). It is the purpose of this research to analyse household financial decision making after the occurrence of a shock.

Keywords: Labour Supply; Credit Rationing; Credit Market; Credit Constraint; Shock Event (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-30662-2_10

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DOI: 10.1057/9780230306622_10

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