Pub Date : 2024-07-20DOI: 10.1016/j.jdeveco.2024.103341
This paper examines how communist propaganda affects gender norms and behavior in China. Improving women’s status and promoting gender equality were significant themes of revolutionary propaganda in China from the 1950s to the 1970s. Exploiting plausibly exogenous variation resulting from topography, I find that exposure to radio broadcasts during the Cultural Revolution improved educational gender equality, and such effects were stronger in areas with weaker Confucian norms. Using individual-level census data, I also find positive effects of radio exposure on women’s family-related and career-related outcomes. I explore the possible mechanisms using data from two surveys on gender norms, and my evidence is consistent with rational updating. The significant persuasion effects disappear when more recent data are employed, implying temporary communist influences on entrenched social norms.
{"title":"Communist propaganda and women’s status","authors":"","doi":"10.1016/j.jdeveco.2024.103341","DOIUrl":"10.1016/j.jdeveco.2024.103341","url":null,"abstract":"<div><p>This paper examines how communist propaganda affects gender norms and behavior in China. Improving women’s status and promoting gender equality were significant themes of revolutionary propaganda in China from the 1950s to the 1970s. Exploiting plausibly exogenous variation resulting from topography, I find that exposure to radio broadcasts during the Cultural Revolution improved educational gender equality, and such effects were stronger in areas with weaker Confucian norms. Using individual-level census data, I also find positive effects of radio exposure on women’s family-related and career-related outcomes. I explore the possible mechanisms using data from two surveys on gender norms, and my evidence is consistent with rational updating. The significant persuasion effects disappear when more recent data are employed, implying temporary communist influences on entrenched social norms.</p></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":null,"pages":null},"PeriodicalIF":5.1,"publicationDate":"2024-07-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141847983","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-07-19DOI: 10.1016/j.jdeveco.2024.103344
We used a randomized controlled trial to compare matching grants earmarked for technical training and consulting services with more flexible cash grants and with a control group. The experiment was implemented in a semi-urban and rural fragile setting where subsidizing innovative activities might be particularly important. Firms were selected on the basis of a business plan competition. After two years, beneficiaries of cash grants showed higher survival rates, improved business practices, a higher degree of formalization, and more activities for innovation relative to recipients of matching grants and the control group, but we saw no effects on profits, sales, and employment. Across all outcomes, beneficiaries of cash grants performed better than beneficiaries of matching grants, for them the treatment effects are smaller and often insignificant, though implementation costs were higher. Recipients of cash grants also increased their capital stock more and were more resilient to the COVID-19 crisis.
{"title":"Supporting small firms in a fragile context: Comparing matching and cash grants in Burkina Faso","authors":"","doi":"10.1016/j.jdeveco.2024.103344","DOIUrl":"10.1016/j.jdeveco.2024.103344","url":null,"abstract":"<div><p>We used a randomized controlled trial to compare matching grants earmarked for technical training and consulting services with more flexible cash grants and with a control group. The experiment was implemented in a semi-urban and rural fragile setting where subsidizing innovative activities might be particularly important. Firms were selected on the basis of a business plan competition. After two years, beneficiaries of cash grants showed higher survival rates, improved business practices, a higher degree of formalization, and more activities for innovation relative to recipients of matching grants and the control group, but we saw no effects on profits, sales, and employment. Across all outcomes, beneficiaries of cash grants performed better than beneficiaries of matching grants, for them the treatment effects are smaller and often insignificant, though implementation costs were higher. Recipients of cash grants also increased their capital stock more and were more resilient to the COVID-19 crisis.</p></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":null,"pages":null},"PeriodicalIF":5.1,"publicationDate":"2024-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0304387824000932/pdfft?md5=012080f314a949751eb797974836f59a&pid=1-s2.0-S0304387824000932-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141852300","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-07-19DOI: 10.1016/j.jdeveco.2024.103337
We provide evidence on the link between enrollment in public preschool and child vocabulary, a critical precursor to early literacy. We measure early childhood development among both in-school and out-of-school children in Kenya, allowing us to examine the association between preschool enrollment and cognitive outcomes. Children in our sample are more likely to start school at age three rather than age four if they live within a few hundred meters of the nearest primary school. Three-year-olds living closer to the school also have stronger vocabulary skills, though a similar pattern does not exist among older children. Using proximity to school as an instrument for preprimary enrollment, we find that preprimary enrollment raises mother tongue receptive vocabulary by more than one standard deviation at age three, but does not impact vocabulary at later ages.
{"title":"Preprimary education and early childhood development: Evidence from government schools in rural Kenya","authors":"","doi":"10.1016/j.jdeveco.2024.103337","DOIUrl":"10.1016/j.jdeveco.2024.103337","url":null,"abstract":"<div><p>We provide evidence on the link between enrollment in public preschool and child vocabulary, a critical precursor to early literacy. We measure early childhood development among both in-school and out-of-school children in Kenya, allowing us to examine the association between preschool enrollment and cognitive outcomes. Children in our sample are more likely to start school at age three rather than age four if they live within a few hundred meters of the nearest primary school. Three-year-olds living closer to the school also have stronger vocabulary skills, though a similar pattern does not exist among older children. Using proximity to school as an instrument for preprimary enrollment, we find that preprimary enrollment raises mother tongue receptive vocabulary by more than one standard deviation at age three, but does not impact vocabulary at later ages.</p></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":null,"pages":null},"PeriodicalIF":5.1,"publicationDate":"2024-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141844638","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-07-18DOI: 10.1016/j.jdeveco.2024.103343
We investigate the impact of beer on mortality during the Industrial Revolution in 18th century England. Due to the brewing process, beer represented an improvement over available water sources during this period prior to the widespread understanding of the link between water quality and human health. Using a wide range of identification strategies to derive measures of beer scarcity driven by tax increases, weather events, and soil quality, we show that beer scarcity was associated with higher mortality, especially in the summer months when mortality was more likely to be driven by waterborne illnesses related to contaminated drinking water. We also leverage variation in inherent water quality across parishes using two proxies for water quality to show that beer scarcity resulted in greater deaths in areas with worse water quality. Together, the evidence indicates that beer had a major impact on human health during this important period in economic development.
{"title":"When beer is safer than water: Beer availability and mortality from waterborne illnesses","authors":"","doi":"10.1016/j.jdeveco.2024.103343","DOIUrl":"10.1016/j.jdeveco.2024.103343","url":null,"abstract":"<div><p>We investigate the impact of beer on mortality during the Industrial Revolution in 18th century England. Due to the brewing process, beer represented an improvement over available water sources during this period prior to the widespread understanding of the link between water quality and human health. Using a wide range of identification strategies to derive measures of beer scarcity driven by tax increases, weather events, and soil quality, we show that beer scarcity was associated with higher mortality, especially in the summer months when mortality was more likely to be driven by waterborne illnesses related to contaminated drinking water. We also leverage variation in inherent water quality across parishes using two proxies for water quality to show that beer scarcity resulted in greater deaths in areas with worse water quality. Together, the evidence indicates that beer had a major impact on human health during this important period in economic development.</p></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":null,"pages":null},"PeriodicalIF":5.1,"publicationDate":"2024-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141842076","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-07-18DOI: 10.1016/j.jdeveco.2024.103340
Utilizing a novel database including nearly 2.2 billion booking records in China, we examine whether people escape from pollution by traveling to “cleaner” places. Combining an instrumental variable approach with high-dimensional fixed effects, we find a 50-unit increase in the AQI gap between a city pair leads to a 1.30% (1.33%) increase in train and airline ticket bookings from the origin to the destination city departing within one day (2–7 days). In addition, the destination of such pollution-induced trips is more likely to be an intra-province city with more tourist attractions. We also measure willingness to pay for clean air.
{"title":"Pollution-induced trips: Evidence from flight and train bookings in China","authors":"","doi":"10.1016/j.jdeveco.2024.103340","DOIUrl":"10.1016/j.jdeveco.2024.103340","url":null,"abstract":"<div><p>Utilizing a novel database including nearly 2.2 billion booking records in China, we examine whether people escape from pollution by traveling to “cleaner” places. Combining an instrumental variable approach with high-dimensional fixed effects, we find a 50-unit increase in the AQI gap between a city pair leads to a 1.30% (1.33%) increase in train and airline ticket bookings from the origin to the destination city departing within one day (2–7 days). In addition, the destination of such pollution-induced trips is more likely to be an intra-province city with more tourist attractions. We also measure willingness to pay for clean air.</p></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":null,"pages":null},"PeriodicalIF":5.1,"publicationDate":"2024-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141850536","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-07-17DOI: 10.1016/j.jdeveco.2024.103338
Millions of families migrate every year in search of better opportunities. Whether these opportunities materialize for the children brought with them depends on the quality of the destination that their parents selected. Exploiting variation in the age of migration, I analyze the impact of destination quality on the educational outcomes of childhood internal migrants in Indonesia. Using Population Census microdata from 2000 and 2010, I show that children who spend more time growing up in districts characterized by higher average educational attainment among permanent residents tend to exhibit greater probabilities of completing primary and secondary schooling. Moreover, educational outcomes of migrants converge with those of permanent residents at an average rate of 1.7 to 2.2 percent annually, with children from less educated households benefiting more from additional exposure. My findings suggest substantial heterogeneity of returns to childhood migration with respect to destination.
{"title":"Childhood migration and educational attainment: Evidence from Indonesia","authors":"","doi":"10.1016/j.jdeveco.2024.103338","DOIUrl":"10.1016/j.jdeveco.2024.103338","url":null,"abstract":"<div><p>Millions of families migrate every year in search of better opportunities. Whether these opportunities materialize for the children brought with them depends on the quality of the destination that their parents selected. Exploiting variation in the age of migration, I analyze the impact of destination quality on the educational outcomes of childhood internal migrants in Indonesia. Using Population Census microdata from 2000 and 2010, I show that children who spend more time growing up in districts characterized by higher average educational attainment among permanent residents tend to exhibit greater probabilities of completing primary and secondary schooling. Moreover, educational outcomes of migrants converge with those of permanent residents at an average rate of 1.7 to 2.2 percent annually, with children from less educated households benefiting more from additional exposure. My findings suggest substantial heterogeneity of returns to childhood migration with respect to destination.</p></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":null,"pages":null},"PeriodicalIF":5.1,"publicationDate":"2024-07-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0304387824000877/pdfft?md5=2768191feed6a1929f817955cd9ef755&pid=1-s2.0-S0304387824000877-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141846122","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-07-15DOI: 10.1016/j.jdeveco.2024.103339
We examine the impact of competition from better connectivity to domestic markets on formal and informal firms. Combining geolocalized information on road improvements under a large infrastructure investment programme with data on manufacturing firms in Ethiopia between 2001 and 2013, we show that an increase in competition is associated with higher labour productivity, capital-intensity, investment in physical capital and wages in the formal sector. On the contrary, there is no associated increase in labour productivity or wages in the informal sector. In fact, increased competition results in lower capital-intensity and investment, a shift in composition towards workers without primary education and a lower likelihood of operating in the informal sector. We thus highlight that the benefits of infrastructure improvement programmes may not accrue uniformly in the economy.
{"title":"Roads, competition, and the informal sector","authors":"","doi":"10.1016/j.jdeveco.2024.103339","DOIUrl":"10.1016/j.jdeveco.2024.103339","url":null,"abstract":"<div><p>We examine the impact of competition from better connectivity to domestic markets on formal and informal firms. Combining geolocalized information on road improvements under a large infrastructure investment programme with data on manufacturing firms in Ethiopia between 2001 and 2013, we show that an increase in competition is associated with higher labour productivity, capital-intensity, investment in physical capital and wages in the formal sector. On the contrary, there is no associated increase in labour productivity or wages in the informal sector. In fact, increased competition results in lower capital-intensity and investment, a shift in composition towards workers without primary education and a lower likelihood of operating in the informal sector. We thus highlight that the benefits of infrastructure improvement programmes may not accrue uniformly in the economy.</p></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":null,"pages":null},"PeriodicalIF":5.1,"publicationDate":"2024-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0304387824000889/pdfft?md5=69ea6cfaa713026d30c61bd272d3ee87&pid=1-s2.0-S0304387824000889-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141704500","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-07-14DOI: 10.1016/j.jdeveco.2024.103334
We study how internal migration responds to an increase in criminal violence in the context of Mexico’s 2007 War on Drugs. To identify causal effects, we exploit the changes in homicides generated by conflict between drug-trafficking organizations. Instrumental variable regressions show that high skilled individuals are less likely to migrate to a municipality where the homicide rate increased. Conversely, we find out-migration from municipalities that experienced an increase in murders but only to other municipalities in the same commuting zone. We interpret these facts as evidence that the migration response to increases in violence is tempered by moving costs. Using a discrete-choice model over destination choices, we estimate individuals would be willing to accept a reduction in wages of 0.15% to 0.58% to decrease the local homicide rate by 1%. The welfare cost of the post-2007 spike in homicides is in the order of 10% of GDP per year.
我们研究了在墨西哥 2007 年禁毒战争的背景下,国内移民如何应对犯罪暴力的增加。为了确定因果效应,我们利用了贩毒组织之间的冲突所引发的杀人案件的变化。工具变量回归表明,高技能人才不太可能迁移到凶杀率上升的城市。与此相反,我们发现谋杀案增加的城市也会向外移民,但只向同一通勤区的其他城市移民。我们将这些事实解释为暴力事件增加时的移民反应受到迁移成本的影响。利用目的地选择的离散选择模型,我们估计个人愿意接受工资下降 0.15%至 0.58%,以降低当地 1%的凶杀率。2007 年后凶杀案激增的福利成本约为每年 GDP 的 10%。
{"title":"Internal migration and drug violence in Mexico","authors":"","doi":"10.1016/j.jdeveco.2024.103334","DOIUrl":"10.1016/j.jdeveco.2024.103334","url":null,"abstract":"<div><p>We study how internal migration responds to an increase in criminal violence in the context of Mexico’s 2007 War on Drugs. To identify causal effects, we exploit the changes in homicides generated by conflict between drug-trafficking organizations. Instrumental variable regressions show that high skilled individuals are less likely to migrate to a municipality where the homicide rate increased. Conversely, we find out-migration from municipalities that experienced an increase in murders but only to other municipalities in the same commuting zone. We interpret these facts as evidence that the migration response to increases in violence is tempered by moving costs. Using a discrete-choice model over destination choices, we estimate individuals would be willing to accept a reduction in wages of 0.15% to 0.58% to decrease the local homicide rate by 1%. The welfare cost of the post-2007 spike in homicides is in the order of 10% of GDP per year.</p></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":null,"pages":null},"PeriodicalIF":5.1,"publicationDate":"2024-07-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141935451","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-07-09DOI: 10.1016/j.jdeveco.2024.103336
In many Sub-Saharan countries, farmers cannot meet the growing urban demand for higher quality products. While the literature has focused on production-side constraints to enhance smallholder farmers’ output quality, there is scarce evidence of market-side constraints. Using a sample of 60 wheat markets in Ethiopia, I assess whether farmers received a price premium for supplying higher quality outputs. I exploit a unique feature of the data which precisely measures observable and less or unobservable quality attributes, and relate them to transaction prices. Observable attributes cannot serve as proxies for less observable ones. Transaction prices further reflect this, indicating that markets only reward quality attributes that are observable at no cost. However, these results hide cross-market heterogeneity. Farmers engage in relational contracts receive a higher price but similar rewards for quality. Observable quality attributes are better rewarded in markets with more traders per farmer, while unobservable attributes are rewarded in the presence of other value chain actors (i.e., grain millers and farmer cooperatives). Both regression and machine learning approaches support these findings.
{"title":"Returns to quality in rural agricultural markets: Evidence from wheat markets in Ethiopia","authors":"","doi":"10.1016/j.jdeveco.2024.103336","DOIUrl":"10.1016/j.jdeveco.2024.103336","url":null,"abstract":"<div><p>In many Sub-Saharan countries, farmers cannot meet the growing urban demand for higher quality products. While the literature has focused on production-side constraints to enhance smallholder farmers’ output quality, there is scarce evidence of market-side constraints. Using a sample of 60 wheat markets in Ethiopia, I assess whether farmers received a price premium for supplying higher quality outputs. I exploit a unique feature of the data which precisely measures observable and less or unobservable quality attributes, and relate them to transaction prices. Observable attributes cannot serve as proxies for less observable ones. Transaction prices further reflect this, indicating that markets only reward quality attributes that are observable at no cost. However, these results hide cross-market heterogeneity. Farmers engage in relational contracts receive a higher price but similar rewards for quality. Observable quality attributes are better rewarded in markets with more traders per farmer, while unobservable attributes are rewarded in the presence of other value chain actors (i.e., grain millers and farmer cooperatives). Both regression and machine learning approaches support these findings.</p></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":null,"pages":null},"PeriodicalIF":5.1,"publicationDate":"2024-07-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0304387824000853/pdfft?md5=18c8f8752770cfc7cbc6102ebd009af6&pid=1-s2.0-S0304387824000853-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141707293","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-07-08DOI: 10.1016/j.jdeveco.2024.103335
We study how altruism networks affect the demand for formal insurance. Agents with CARA utilities are connected through a network of altruistic relationships. Incomes are subject to a common shock and to a large individual shock, generating heterogeneous damages. Agents can buy formal insurance to cover the common shock, up to a coverage cap. We find that ex-post altruistic transfers induce interdependence in ex-ante formal insurance decisions. We characterize the Nash equilibria of the insurance game and show that agents act as if they are trying to maximize the expected utility of a representative agent with average damages. Altruism thus tends to increase demand of low-damage agents and to decrease demand of high-damage agents. Its aggregate impact depends on the interplay between demand homogenization, the zero lower bound and the coverage cap. We find that aggregate demand is higher with altruism than without altruism at low prices and lower at high prices. Nash equilibria are constrained Pareto efficient.
我们研究利他主义网络如何影响对正规保险的需求。具有 CARA 效用的代理人通过利他主义关系网络联系在一起。收入会受到共同冲击和巨大的个体冲击,从而产生异质性损害。代理人可以购买正式保险来抵御共同冲击,但保险额度不得超过上限。我们发现,事后的利他主义转移会导致事前的正式保险决策相互依赖。我们描述了保险博弈的纳什均衡,并表明代理人的行为就像他们试图最大化具有平均损失的代表代理人的预期效用一样。因此,利他主义倾向于增加低损失代理人的需求,减少高损失代理人的需求。它的总体影响取决于需求同质化、零下限和保险上限之间的相互作用。我们发现,在低价格时,有利他主义的总需求高于无利他主义的总需求,而在高价格时,总需求则低于无利他主义的总需求。纳什均衡是受约束的帕累托效率。
{"title":"Formal insurance and altruism networks","authors":"","doi":"10.1016/j.jdeveco.2024.103335","DOIUrl":"10.1016/j.jdeveco.2024.103335","url":null,"abstract":"<div><p>We study how altruism networks affect the demand for formal insurance. Agents with CARA utilities are connected through a network of altruistic relationships. Incomes are subject to a common shock and to a large individual shock, generating heterogeneous damages. Agents can buy formal insurance to cover the common shock, up to a coverage cap. We find that <em>ex-post</em> altruistic transfers induce interdependence in <em>ex-ante</em> formal insurance decisions. We characterize the Nash equilibria of the insurance game and show that agents act as if they are trying to maximize the expected utility of a representative agent with average damages. Altruism thus tends to increase demand of low-damage agents and to decrease demand of high-damage agents. Its aggregate impact depends on the interplay between demand homogenization, the zero lower bound and the coverage cap. We find that aggregate demand is higher with altruism than without altruism at low prices and lower at high prices. Nash equilibria are constrained Pareto efficient.</p></div>","PeriodicalId":48418,"journal":{"name":"Journal of Development Economics","volume":null,"pages":null},"PeriodicalIF":5.1,"publicationDate":"2024-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0304387824000841/pdfft?md5=eea8398e3d665eda1d5f53baf2c56a52&pid=1-s2.0-S0304387824000841-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141622234","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}