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Is a Friend in Need a Friend Indeed? Inclusion and Exclusion in Mutual Insurance Networks in Southern Ghana

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  • Goldstein, Markus
  • de Janvry, Alain
  • Sadoulet, Elisabeth

Abstract

Mutual insurance has been shown, theoretically and empirically, to be incomplete and limited by asymmetric information and lack of enforcement mechanisms. While some research has shown that networks based on kinship, neighborhood and ethnicity may provide a locus of insurance and thus a way of overcoming these problems, these studies are not fine enough to predict the inclusion and exclusion of individuals. Using data from rural Ghana, we examine the role of social relations in obtaining assistance in the face of shocks. We examine this at both the intra-household and community levels. At the household level, asking for and receiving assistance from the spouse is related to gender, the quality of the marital relationship, and the wealth of household members. At the community level, asking for and receiving help are correlated with membership in a major lineage, participation in secular organizations, the individual's fostering history, and anticipated land inheritance. We also show that these factors differ depending on whether the shortfall was for a household or personal item (as perceived by the respondent). This work helps us to identify individuals who are more likely to fall outside of mutual insurance networks and require interventions to help them cope with risk.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Goldstein, Markus & de Janvry, Alain & Sadoulet, Elisabeth, 2003. "Is a Friend in Need a Friend Indeed? Inclusion and Exclusion in Mutual Insurance Networks in Southern Ghana," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0d89m20g, Department of Agricultural & Resource Economics, UC Berkeley.
  • Handle: RePEc:cdl:agrebk:qt0d89m20g
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    1. Jalan, Jyotsna & Ravallion, Martin, 1999. "Are the poor less well insured? Evidence on vulnerability to income risk in rural China," Journal of Development Economics, Elsevier, vol. 58(1), pages 61-81, February.
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    13. Murgai, Rinku & Winters, Paul & Sadoulet, Elisabeth & Janvry, Alain de, 2002. "Localized and incomplete mutual insurance," Journal of Development Economics, Elsevier, vol. 67(2), pages 245-274, April.
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    Cited by:

    1. Isabel Fischer & Tina Beuchelt & Tom Dufhues & Gertrud Buchenrieder, 2010. "Risk management networks of ethnic minorities in Viet Nam," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 17(2), pages 83-118, December.
    2. Margherita Comola, 2010. "The network structure of mutual support links: Evidence from rural Tanzania," PSE Working Papers halshs-00585968, HAL.
    3. Djuikom, Marie Albertine & van de Walle, Dominique, 2022. "Marital status and women’s nutrition in Africa," World Development, Elsevier, vol. 158(C).
    4. Alice Nicole Sindzingre, 2007. "Poverty traps: a perspective from development economics," Working Papers hal-04139210, HAL.
    5. Masako Hasegawa, 2017. "Risk-Coping Measures against Health Shocks during the Process of Penetration of Health Insurance in Vietnam," Asian Economic Journal, East Asian Economic Association, vol. 31(2), pages 139-164, June.
    6. Machiko Nissanke & Alice Sindzingre, 2006. "Institutional Foundations for Shared Growth in Sub‐Saharan Africa," African Development Review, African Development Bank, vol. 18(3), pages 353-391.
    7. Alice Nicole Sindzingre, 2007. "Poverty traps: a perspective from development economics," EconomiX Working Papers 2007-26, University of Paris Nanterre, EconomiX.

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    More about this item

    Keywords

    household models; insurance; risk; social aspects; villages;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • D1 - Microeconomics - - Household Behavior
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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