Using data from an experiment conducted in 70 Colombian communities, we investigate who pools risk with whom when trust is crucial for enforcing risk pooling arrangements. We explore the roles played by risk attitudes and social networks. Both empirically and theoretically, we find that close friends and relatives group assortatively on risk attitudes and are more likely to join the same risk pooling group, while unfamiliar participants group less and rarely assort. These findings indicate that where there are advantages to grouping assortatively on risk attitudes those advantages may be inaccessible when trust is absent or low.
Authors
Research Fellow
Orazio is an International Research Fellow at the IFS, a Professor at Yale and a Research Associate at the National Bureau of Economic Research.
Research Fellow Yale University
Costas is a Research Fellow of the IFS and a Professor of Economics at Yale University and a Visiting Professor at University College London.
Abigail Barr
Juan Camilo Cardenas
Garance Genicot
Journal article details
- Publisher
- American Economic Association
- Issue
- April 2012
Suggested citation
Attanasio, O et al. (2012). 'Risk Pooling, Risk Preferences, and Social Networks' (2012)
More from IFS
Understand this issue
If you can’t see it, you can’t be it: role models influence female junior doctors’ choice of medical specialty
24 April 2024
Sure Start achieved its aims, then we threw it away
15 April 2024
Retirement is not always a choice that workers can afford to make
6 November 2023
Policy analysis
How do the last five years measure up on levelling up?
19 June 2024
A decade and a half of historically poor growth has taken its toll
3 June 2024
The Conservatives and the Economy, 2010–24
3 June 2024
Academic research
Targeting men, women or both to reduce child marriage
28 May 2024
Keeping the peace whilst getting your way: Information, persuasion and intimate partner violence
17 May 2024
Forced displacement, mental health, and child development: Evidence from Rohingya refugees
10 May 2024