Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution

@article{Jack2014RiskSA,
  title={Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution},
  author={William Jack and Tavneet Suri},
  journal={The American Economic Review},
  year={2014},
  volume={104},
  pages={183-223}
}
We explore the impact of reduced transaction costs on risk sharing by estimating the effects of a mobile money innovation on consumption. In our panel sample, adoption of the innovation increased from 43 to 70 percent. We find that, while shocks reduce consumption by 7 percent for nonusers, the consumption of user households is unaffected. The mechanisms underlying these consumption effects are increases in remittances received and the diversity of senders. We report robustness checks… 
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