Title：Propagation and Insurance in Village Networks

Speaker:  Cynthia Kinnan，Tufts University

Time：Nov.15，9：00 – 10：30 am (Beijing Time)

On Zoom

About the Speaker:

Cynthia Kinnan is an assistant professor of economics at Tufts University. She received her PhD from the Massachusetts Institute of Technology. Her research focuses on how households and small firms in developing countries use financial products (such as credit, insurance, savings) and informal networks to finance investment and cope with risk. She is particularly interested in the causes of missing markets, in the interaction between risk and household investment, in social networks, and in microfinance. Her work draws on randomized control trials, natural experiments, and estimating equilibrium relationships implied by theory. She is a faculty research fellow at the National Bureau of Economic Research (NBER) and an affiliate of the Jameel Poverty Action Lab (JPAL) and the Bureau for Research and Economic Analysis of Development (BREAD).

Abstract：

In village economies, it is well known that networks can smooth shocks. Less acknowledged is that local production networks can propagate shocks. In Thailand, a significant idiosyncratic shock to one household propagates via supply-chain and labor networks. Imperfectly insured households adjust production decisions---cutting input spending and reducing hiring---affecting households with whom they trade inputs and labor. Those linked to shocked households experience reduced local transactions, earnings, and consumption. These declines persist over several years. The total magnitude of indirect effects may be larger than direct effects. Social gains from expanding safety nets may be substantially higher than private gains.