Heterogeneity and Risk-Sharing in Village Economies
"Heterogeneity and Risk-Sharing in Village Economies." Pierre Andre Chiappori, KrislertSamphantharak, Sam Schulhofer-Wohl, and Robert M. Townsend. Quantitative Economics 5(1) 2014: 1-27. ABSTRACTPDF. For 2013 working paper version: PDF
Theory & Data
This paper measures heterogeneity in risk aversion among households in Thai villages using a full risk-sharing model and complements the results with a measure based on optimal portfolio choice. The authors find substantial heterogeneity in risk preferences estimated from the full-insurance model, positively correlated in most villages with portfolio-choice estimates.