The Formation of Risk Sharing Networks GPRG-WPS-037

  title={The Formation of Risk Sharing Networks GPRG-WPS-037},
  author={Marcel Fafchamps and Flore Gubert},
This paper examines the endogenous formation of risk sharing networks in the rural Philippines. We show that geographic proximity is a major determinant of interpersonal relationships. We …nd little evidence that people form relationships to pool income risk. The existence of a pre-existing relationship between two individuals is a major determinant of subsequent gifts and informal loans between them, controlling for other proximity factors. From this we conclude that these transfers and… CONTINUE READING
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