Household consumption smoothing through ethnic ties: evidence from Cote d'Ivoire

This paper investigates the hypothesis that households in Cote d'Ivoire take part in spatially diversified risk-sharing arrangements with members of their own ethnic group. Empirical tests are presented using several estimation methods to deal with heteroscedasticity, measurement error and extreme value problems to examine whether results are robust across estimation procedures. The hypothesis of complete risk-sharing within ethnic groups is rejected. However, there appears to be some partial insurance performed by individual households with other members of the same ethnic group, particularly for the households residing in the regions least likely to have access to formal financial arrangements. (C) 1997 Elsevier Science B.V.