Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution
We explore the impact of reduced transaction costs on risk sharing by estimating the effects of a mobile money innovation on consumption. In our panel sample, adoption of the innovation increased from 43 to 70 percent. We find that, while shocks reduce consumption by 7 percent for nonusers, the cons...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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American Economic Association
2014
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| Online Access: | http://hdl.handle.net/1721.1/88137 https://orcid.org/0000-0002-7552-7945 |
| _version_ | 1826198542120648704 |
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| author | Jack, William Suri, Tavneet |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Jack, William Suri, Tavneet |
| author_sort | Jack, William |
| collection | MIT |
| description | We explore the impact of reduced transaction costs on risk sharing by estimating the effects of a mobile money innovation on consumption. In our panel sample, adoption of the innovation increased from 43 to 70 percent. We find that, while shocks reduce consumption by 7 percent for nonusers, the consumption of user households is unaffected. The mechanisms underlying these consumption effects are increases in remittances received and the diversity of senders. We report robustness checks supporting these results and use the four-fold expansion of the mobile money agent network as a source of exogenous variation in access to the innovation. |
| first_indexed | 2024-09-23T11:06:11Z |
| format | Article |
| id | mit-1721.1/88137 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T11:06:11Z |
| publishDate | 2014 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/881372022-09-27T17:09:41Z Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution Jack, William Suri, Tavneet Sloan School of Management Suri, Tavneet We explore the impact of reduced transaction costs on risk sharing by estimating the effects of a mobile money innovation on consumption. In our panel sample, adoption of the innovation increased from 43 to 70 percent. We find that, while shocks reduce consumption by 7 percent for nonusers, the consumption of user households is unaffected. The mechanisms underlying these consumption effects are increases in remittances received and the diversity of senders. We report robustness checks supporting these results and use the four-fold expansion of the mobile money agent network as a source of exogenous variation in access to the innovation. Consortium on Financial Systems and Poverty (U.S.) 2014-06-30T17:10:08Z 2014-06-30T17:10:08Z 2014-01 Article http://purl.org/eprint/type/JournalArticle 0002-8282 1944-7981 http://hdl.handle.net/1721.1/88137 Jack, William, and Tavneet Suri. “ Risk Sharing and Transactions Costs: Evidence from Kenya’s Mobile Money Revolution.” American Economic Review 104, no. 1 (January 2014): 183–223. © 2014 American Economic Association https://orcid.org/0000-0002-7552-7945 en_US http://dx.doi.org/10.1257/aer.104.1.183 American Economic Review Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf American Economic Association American Economic Association |
| spellingShingle | Jack, William Suri, Tavneet Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution |
| title | Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution |
| title_full | Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution |
| title_fullStr | Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution |
| title_full_unstemmed | Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution |
| title_short | Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution |
| title_sort | risk sharing and transactions costs evidence from kenya s mobile money revolution |
| url | http://hdl.handle.net/1721.1/88137 https://orcid.org/0000-0002-7552-7945 |
| work_keys_str_mv | AT jackwilliam risksharingandtransactionscostsevidencefromkenyasmobilemoneyrevolution AT suritavneet risksharingandtransactionscostsevidencefromkenyasmobilemoneyrevolution |