This article explores financial strategies used by smallholder farmers in the face of the challenging conditions following the economic crisis in the early 2000s in Zimbabwe. It considers the... Show moreThis article explores financial strategies used by smallholder farmers in the face of the challenging conditions following the economic crisis in the early 2000s in Zimbabwe. It considers the sources, circulation and importance of cash among farmers in the cash-scarce society that emerged with hyperinflation and subsequent dollarization and that rendered farmers' savings worthless. The article is based on transaction diaries from 20 farmers in two different rural communities in Zimbabwe. These diaries provided details of expenditures in a three-week period in November/December 2010 and intend to provide insight into the day-to-day realities that affects many in Zimbabwe. These diaries show the very limited inflow of cash and that many households did not have any cash at their disposal. Contrary to other sources, our data suggest that the importance of remittances in these villages is far less than expected. Furthermore, in contrast with standard economic thinking, farmers rarely reverted to 'instantaneous barter'. Instead, the shortage of cash resulted in an intensification of gift-giving in kind in which small gifts were exchanged between family members, neighbours and other close relations and that were especially important to meet daily household needs of farmers and their families. Show less
Based on household survey data and event history interviews undertaken in a highly shock prone country, this paper investigates which shocks trigger which coping responses and why? We find clear... Show moreBased on household survey data and event history interviews undertaken in a highly shock prone country, this paper investigates which shocks trigger which coping responses and why? We find clear differences in terms of coping strategies across shock types. The two relatively covariate shocks, that is, economic and natural shocks are more likely to trigger reductions in savings and in food consumption while the sale of assets and borrowing is less common. Coping with relatively idiosyncratic health shocks is met by reductions in savings, asset sales and especially a far greater reliance on borrowing as compared to other shocks. Reductions in food consumption, a prominent response in the case of natural and economic shocks is notably absent in the case of health shocks. Across all shock types, households do not rely on gifts from family and friends or on enhancing their labour supply as coping approaches. The relative insensitivity of food consumption to health shocks based on the shocks-coping analysis presented here is consistent with existing work which examines consumption insurance. However, our analysis leads to a different interpretation. We argue that this insensitivity should not be viewed as insurability of food consumption against health shocks but rather as an indication that a reduction in food consumption is not a viable coping response to a health shock as it does not provide cash to meet health care needs. Show less
Assortative matching occurs in many social contexts. We experimentally investigate gender assorting in sub-Saharan villages. In the experiment, co-villagers could form groups to share winnings in... Show moreAssortative matching occurs in many social contexts. We experimentally investigate gender assorting in sub-Saharan villages. In the experiment, co-villagers could form groups to share winnings in a gamble choice game. The extent to which grouping arrangements were or could be enforced and, hence, the distribution of interaction costs were exogenously varied. Thus, we can distinguish between the effects of homophily and interaction costs on the extent of observed gender assorting. We find that interaction costs matter - there is less gender assorting when grouping depends on trust. In part, this is due to trust based on co-memberships in gender-mixed religions Show less
We investigate whether the set of available enforcement mechanisms affects the formation of risk sharing relations by applying dyadic regression analysis to data from a specifically designed... Show moreWe investigate whether the set of available enforcement mechanisms affects the formation of risk sharing relations by applying dyadic regression analysis to data from a specifically designed behavioural experiment, two surveys and a genealogical mapping exercise. During the experiment participants are invited to form risk sharing relations under three institutional environments, each associated with different enforcement mechanisms: external, intrinsic and endogenous extrinsic, i.e., the threat of (partial) social exclusion. Dyads who are similar in age and gender, genetically related, or who belong to the same organizations with an economic purpose are more likely to share risk. However, the latter are associated with less risk sharing when endogenous extrinsic incentives can be applied, while co-membership in religious congregations and being related by marriage support enforcement through such incentives. We find no evidence of assortative grouping on risk preferences but, ex post, co-groups members' risk-taking behavior converges. Show less
We investigate whether the set of available enforcement mechanisms affects the formation of risk sharing relations by applying dyadic regression analysis to data from a specifically designed... Show moreWe investigate whether the set of available enforcement mechanisms affects the formation of risk sharing relations by applying dyadic regression analysis to data from a specifically designed behavioural experiment, two surveys and a genealogical mapping exercise. During the experiment participants are invited to form risk sharing relations under three institutional environments, each associated with different enforcement mechanisms: external, intrinsic and endogenous extrinsic, i.e., the threat of (partial) social exclusion. Dyads who are similar in age and gender, genetically related, or who belong to the same organizations with an economic purpose are more likely to share risk. However, the latter are associated with less risk sharing when endogenous extrinsic incentives can be applied, while co-membership in religious congregations and being related by marriage support enforcement through such incentives. We find no evidence of assortative grouping on risk preferences but, ex post, co-groups members' risk-taking behavior converges. Show less