Abstract
The article focuses on consumption risk sharing within extended families. Coupled with the concern that dropping split-off households may nonrandomly exclude particular subgroups of the sample, the option of creating a panel of only original households seems unappealing. Creating a panel of extended families, however, implies that the extended family acts as if it is a single household, or to put it differently, that household decisions are made at the extended family level. The majority of the households in developing countries depend on the agricultural sector, where variability in income is high. The lack of a social security system and the absence of a complete financial and insurance market may cause households in these countries to rely on interhousehold informal arrangements as a way to smooth their consumption. It is therefore reasonable to believe that extended families may play a larger role in developing countries than they do in developed countries.
Original language | English |
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Pages (from-to) | 65-94 |
Number of pages | 30 |
Journal | Economic Development and Cultural Change |
Volume | 62 |
Issue number | 1 |
DOIs | |
Publication status | Published - Oct 2013 |
Externally published | Yes |