Marleen Dekker

Coping with shocks in rural Ethiopia

Abstract Using survey data and event history interviews undertaken in Ethiopia, we investigate which shocks trigger which coping responses and why. Relatively covariate natural and economic shocks trigger reductions in savings and in food consumption, while relatively idiosyncratic health shocks prompt reductions in savings and a reliance on borrowing. Surprisingly, across all shocks, households do not rely on gifts from family and friends, highlighting the need for formal protection systems. We argue that the insensitivity of food consumption to health shocks does not imply insurability but indicates that it is not a viable response to such a shock.

Who Shares Risk with Whom under Different Enforcement Mechanisms

We investigate whether available enforcement mechanisms affect who shares risk with whom in sub-Saharan Africa, by applying dyadic regression analysis to data from a lab-type experiment, surveys, and a genealogical-mapping exercise. During the experiment, participants were invited to form risk-sharing groups under three enforcement mechanisms: external, intrinsic, and extrinsic (i.e., social sanctioning). Same-sex dyads and dyads who belong to the same economic community-based organizations (CBOs) are more likely to share risk. However, when social sanctioning is possible, comembers in economic CBOs withdraw from group formation and coreligion, and marriage ties come to the fore.