Informal insurance in the presence of poverty traps : Evidence from southern Ethiopia

@inproceedings{Santos2006InformalII,
  title={Informal insurance in the presence of poverty traps : Evidence from southern Ethiopia},
  author={Paulo Santos and Christopher B. Barrett},
  year={2006}
}
This paper explores the consequences of nonlinear wealth dynamics on the formation of informal insurance networks. Building on recent empirical work among a poor population that finds evidence consistent with the hypothesis of poverty traps, and using original primary data on social networks and transfers, we find that asset transfers respond to recipients’ losses, but only so long as the recipients are not “too poor”. The persistently poor are excluded from social networks and do not receive… CONTINUE READING

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