Risk Pooling through Transfers in Rural Ethiopia

Lei Pan ()

No 07-014/2, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: It is often assumed that transfers received from governments, nongovernment organizations (NGOs), friends and relatives help rural households to pool risk. In this paper I investigate two functions of transfers in Ethiopia: risk pooling and income redistribution. Unlike most of the literature this paper investigates not only whether but also how much risk pooling is achieved. I find evidence that transfers from governments/NGOs play a role in insuring covariant income shocks, (weak) evidence that transfers from friends/relatives insure idiosyncratic income shocks and evidence that transfers target the poor households. However, the contributions of transfers to risk pooling and income redistribution are economically very limited.

Keywords: Risk; Insurance; Income redistribution (search for similar items in EconPapers)
JEL-codes: I38 O17 (search for similar items in EconPapers)
Date: 2007-01-26, Revised 2007-09-28
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20070014

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