Natural Disaster and Risk-Sharing Behavior: Evidence from Rural Bangladesh*
Asad Islam (),
Minhaj Mahmud and
Paul Raschky ()
No 03-18, Monash Economics Working Papers from Monash University, Department of Economics
This paper investigates how exposure to a natural disaster affects risk-sharing behavior us-ing a unique field experiment in rural Bangladesh. We conducted a risk-sharing experiment that randomly assigned different levels of exogenous commitments to households in disasterexposed and unexposed villages and asked them to form risk-sharing groups. Our results show that disaster-affected individuals are less likely to defect from risk-sharing commit-ments, regardless of the level of ex-ante commitment. Interestingly, this group chose more risky bets and realized higher average returns compared to the non-disaster-affected group. Our results have important implications for the design of financial risk-transfer mechanisms in developing countries.
Keywords: Risk preference; risk sharing, intrinsic motivation; asymmetric information; natural disaster; field experiment (search for similar items in EconPapers)
JEL-codes: C90 C93 D03 D71 D81 O12 Q54 (search for similar items in EconPapers)
Pages: 48 pages
New Economics Papers: this item is included in nep-dev, nep-exp and nep-isf
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://www.monash.edu/business/economics/research ... 0318Naturalislam.pdf (application/pdf)
Journal Article: Natural disaster and risk-sharing behavior: Evidence from rural Bangladesh (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:mos:moswps:2018-03
Ordering information: This working paper can be ordered from
http://www.buseco.mo ... eco/research/papers/
Access Statistics for this paper
More papers in Monash Economics Working Papers from Monash University, Department of Economics Department of Economics, Monash University, Victoria 3800, Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Simon Angus ().