Malde, BK; (2016) Essays in development economics. Doctoral thesis , UCL (University College London).

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Abstract

In this dissertation, I use household-level microdata from rural areas of developing countries, combined with simple theory and experimental and micro-econometric techniques, to study informal insurance arrangements within extended family networks, and the consequences of incorrect knowledge of the health production function on health and non-health choices. The first chapter reviews methods for identifying the effects of social networks on outcomes (or social effects) using data with information on exact connections between agents, paying special attention to methods dealing with endogeneity of network formation, and measurement error in the network. The second chapter studies the role of socially close and distant connections in informal risk sharing under imperfect enforcement. Socially close connections can better enforce informal arrangements, but may provide fewer risk sharing opportunities. A simple theoretical framework studies this trade-off and yields qualitative predictions for empirical testing with data from a large number of village-based extended family networks in rural Mexico. In the third chapter, I study the relationship between risk sharing and group size in a setting with limited commitment and coalitional deviations. Building on Genicot and Ray (2003), the chapter shows that the relationship between risk sharing and group size is theoretically ambiguous. I then study the question empirically using data from rural Malawi and exploiting historical norms, which indicate that a woman's brothers play an important role in ensuring her household's wellbeing, to define the risk sharing group. I find that households where the wife has many brothers achieve worse risk sharing. The final chapter studies the effects of a randomized intervention in rural Malawi which, over a six-month period, provided mothers of young infants with information on child nutrition only. Findings show that the intervention improved infant nutrition, household food consumption and child health. Male labour supply also increased, partially funding the increased consumption.

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