Risk-Sharing Networks in Rural Philippines

Marcel Fafchamps and Susan Lund

No 10, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: Using detailed data on gifts, loans, and asset sales, this paper investigates how rural Filipino households deal with income and expenditure shocks. We find that shocks have a strong effect on gifts and informal loans, but little effect on sales of livestock and grain. Mutual insurance does not appear to take place at the village level; rather, households receive help primarily through networks of friends and relatives. Certain shocks are better insured than others. The evidence is consistent with models of quasi-credit where risk is shared within tightly knit networks through flexible, zero interest informal loans combined with pure transfers.

Keywords: risk sharing; informal credit; insurance; gifts; consumption smoothing (search for similar items in EconPapers)
JEL-codes: O12 Q12 (search for similar items in EconPapers)
Date: 2000-04-01
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Citations: View citations in EconPapers (23)

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Journal Article: Risk-sharing networks in rural Philippines (2003)
Working Paper: Risk Sharing Networks in Rural Philippines
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