Risk taking and the quality of informal insurance: gambling and remittances in Thailand

Douglas Miller and Anna Paulson

No WP-07-01, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: More than 35% of Thai households either give or receive remittances, and remittances account for about one-third of the income of the receiving households. Remittance relationships may be an important source of protection against adverse events for the individuals involved. This paper provides evidence that remittances behave in a way that is consistent with insurance: they are sensitive to shocks to regional rainfall and they respond to household level events. The paper goes on to consider how the quality of insurance that is offered through remittances affects household risk taking behavior. Specifically, we show that the likelihood and the amount of gambling increase with the quality of informal insurance. The findings suggest that households who are more insured shift their portfolios toward riskier investments.

Keywords: Gambling industry; Payment systems; Insurance (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-dev, nep-ias and nep-sea
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.chicagofed.org/digital_assets/publicati ... s/2007/wp2007_01.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:fip:fedhwp:wp-07-01

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Paper Series from Federal Reserve Bank of Chicago Contact information at EDIRC.
Bibliographic data for series maintained by Lauren Wiese ().