EconPapers    
Economics at your fingertips  
 

Does Voluntary Risk Taking Affect Solidarity? Experimental Evidence from Kenya

Renate Strobl () and Conny Wunsch ()
Additional contact information
Renate Strobl: University of Basel

No 10906, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: In this study we experimentally investigate whether solidarity, which is a crucial base for informal insurance arrangements in developing countries, is sensitive to the extent to which individuals can influence their risk exposure. With slum dwellers of Nairobi our design measures subjects' willingness to share income with a worse-off partner both in a setting where participants could either deliberately choose or were randomly assigned to a safe or a risky project. We find that when risk exposure is a choice, willingness to give is roughly 9 percentage points lower compared to when it is exogenously assigned to subjects. The reduction of solidarity is driven by a change in giving behaviour of persons with the risky project. Compared to their counterparts in the random treatment, voluntary risk takers are seemingly less motivated to share their high payoff with their partner, especially if this person failed after choosing the risky project. This suggests that the willingness to show solidarity is influenced by both the desire for own compensation and attributions of responsibility. Our findings have important implications for policies that interact with existing informal insurance arrangements.

Keywords: solidarity; risk taking; Kenya (search for similar items in EconPapers)
JEL-codes: D81 C91 O12 D63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr, nep-cbe, nep-exp, nep-ppm and nep-upt
Date: 2017-07
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://ftp.iza.org/dp10906.pdf (application/pdf)

Related works:
Working Paper: Does Voluntary Risk Taking Affect Solidarity? Experimental Evidence from Kenya (2018) Downloads
Working Paper: Does Voluntary Risk Taking Affect Solidarity? Experimental Evidence from Kenya (2017) Downloads
Working Paper: Does Voluntary Risk Taking Affect Solidarity? Experimental Evidence from Kenya (2017) Downloads
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:iza:izadps:dp10906

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute for the Study of Labor (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Mark Fallak ().

 
Page updated 2019-03-22
Handle: RePEc:iza:izadps:dp10906