TY  - JOUR
ID  - publications26252
UR  - http://tse-fr.eu/pub/32938
IS  - n° 1
A1  - Alger, Ingela
A1  - Juarez, Laura
A1  - Juarez-Torres, Miriam
A1  - Miquel-Florensa, Josepa
N2  - How does informal risk sharing affect incentives to avoid risk? While moral hazard is expected under formal insurance, theory suggests that the incentive effects of informal risk sharing are ambiguous: internalization of the external effects of transfers on others may reduce or enhance incentives to avoid risk. To study this issue, which is particularly relevant for developing economies, we designed a novel real-effort lab experiment and conducted it in 16 small villages in rural Mexico. We find that subjects internalize the effects of transfers enough for the presence of transfers to significantly increase effort compared to autarky situations.
VL  - vol. 69
TI  - Do informal transfers induce lower efforts? Evidence from lab-in-the-field experiments in rural Mexico
AV  - public
EP  - 171
Y1  - 2020/10//
PB  - University of Chicago Press
JF  - Economic Development and Cultural Change
KW  - informal insurance
KW  - effort
KW  - moral hazard
KW  - free-riding effect
KW  - empathy effect
SN  - 0013-0079
SP  - 107
ER  -