Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution
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Suri_Risk sharing.pdf
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976.91 KB
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Adobe PDF
Checksum (MD5)
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Author(s)
Jack, William
Suri, Tavneet
Date Issued
January 2014
Journal
American Economic Review
Publisher
American Economic Association
Citation
Jack, William, and Tavneet Suri. “ Risk Sharing and Transactions Costs: Evidence from Kenya’s Mobile Money Revolution.” American Economic Review 104, no. 1 (January 2014): 183–223. © 2014 American Economic Association
Version
Final published version
Abstract
We explore the impact of reduced transaction costs on risk sharing by estimating the effects of a mobile money innovation on consumption. In our panel sample, adoption of the innovation increased from 43 to 70 percent. We find that, while shocks reduce consumption by 7 percent for nonusers, the consumption of user households is unaffected. The mechanisms underlying these consumption effects are increases in remittances received and the diversity of senders. We report robustness checks supporting these results and use the four-fold expansion of the mobile money agent network as a source of exogenous variation in access to the innovation.
MIT Department
Sloan School of Management
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/aer.104.1.183
