Confronting the risk of asset loss: What role do livestock transfers in northern Kenya play?

In many low-income, high-risk environments households participate in informal risk sharing institutions involving inter-household transfers. This study focuses on: asset transfers and asset risk; the influence of past behavior on access to transfers; and wealth-differentiated transfer behavior. Pane...

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Bibliographic Details
Published in:Journal of development economics 2006-12, Vol.81 (2), p.415-437
Main Author: McPeak, John
Format: Article
Language:English
Subjects:
Asset risk
Asset transfers
Assets
Bivariate tobit
Development economics
Economic development
Household economics
Information
Kenya
Knowledge
Livestock
Risk sharing
Studies
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Summary:In many low-income, high-risk environments households participate in informal risk sharing institutions involving inter-household transfers. This study focuses on: asset transfers and asset risk; the influence of past behavior on access to transfers; and wealth-differentiated transfer behavior. Panel data on livestock transfers in northern Kenya are analyzed. Three explanations of livestock transfers are investigated: ex post insurance; ex ante precautionary savings; and redistribution. Findings indicate that livestock transfers are of limited effectiveness in addressing asset risk and avoiding poverty. The findings have implications for both research on risk sharing institutions and for the design of development policies in pastoral areas.
ISSN:0304-3878
1872-6089
DOI:10.1016/j.jdeveco.2005.06.010