Health shocks and consumption smoothing in rural households: Does microcredit have a role to play?

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Abstract

This paper estimates, using a large panel data set from rural Bangladesh, the effects of health shocks on household consumption and how access to microcredit affects households response to such shocks. Households appear to be fairly well insured against health shocks. Our results suggest that households sell livestock in response to health shocks and short term insurance is therefore attained at a significant long term cost. However microcredit has a significant mitigating effect. Households that have access to microcredit do not need to sell livestock in order to insure consumption. Microcredit organizations and microcredit therefore have an insurance role to play, an aspect that has not been analyzed previously.
Original languageEnglish
Pages (from-to)232 - 243
Number of pages12
JournalJournal of Development Economics
Volume97
Issue number2
DOIs
Publication statusPublished - 2012

Cite this

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title = "Health shocks and consumption smoothing in rural households: Does microcredit have a role to play?",
abstract = "This paper estimates, using a large panel data set from rural Bangladesh, the effects of health shocks on household consumption and how access to microcredit affects households response to such shocks. Households appear to be fairly well insured against health shocks. Our results suggest that households sell livestock in response to health shocks and short term insurance is therefore attained at a significant long term cost. However microcredit has a significant mitigating effect. Households that have access to microcredit do not need to sell livestock in order to insure consumption. Microcredit organizations and microcredit therefore have an insurance role to play, an aspect that has not been analyzed previously.",
author = "Asadul Islam and Pushkar Maitra",
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Health shocks and consumption smoothing in rural households: Does microcredit have a role to play? / Islam, Asadul; Maitra, Pushkar.

In: Journal of Development Economics, Vol. 97, No. 2, 2012, p. 232 - 243.

Research output: Contribution to journalArticleResearchpeer-review

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AU - Islam, Asadul

AU - Maitra, Pushkar

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AB - This paper estimates, using a large panel data set from rural Bangladesh, the effects of health shocks on household consumption and how access to microcredit affects households response to such shocks. Households appear to be fairly well insured against health shocks. Our results suggest that households sell livestock in response to health shocks and short term insurance is therefore attained at a significant long term cost. However microcredit has a significant mitigating effect. Households that have access to microcredit do not need to sell livestock in order to insure consumption. Microcredit organizations and microcredit therefore have an insurance role to play, an aspect that has not been analyzed previously.

U2 - 10.1016/j.jdeveco.2011.05.003

DO - 10.1016/j.jdeveco.2011.05.003

M3 - Article

VL - 97

SP - 232

EP - 243

JO - Journal of Development Economics

JF - Journal of Development Economics

SN - 0304-3878

IS - 2

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