American Economic Review Vol. 108 No. 10 2018

Testing Efficient Risk Sharing with Heterogeneous Risk Preferences: Comment

Aditya Shrinivas¹; Marcel Fafchamps²

¹ Department of Agricultural and Consumer Economics, University of Illinois Urbana-Champaign, Urbana, IL 61801 (email: ) · ² Freeman Spogli Institute for International Studies, Stanford University, Stanford, CA 940305 (email: )

Abstract

Mazzocco and Saini (2012) propose and implement a test of efficient risk sharing that allows for preference heterogeneity. They motivate their approach as yielding different results from those of a standard efficiency test with homogeneous preferences. We show that the standard efficiency test results are misreported in their paper and that the correctly reported results do not present as compelling a case for the importance of accounting for heterogeneous preferences.

DOI

10.1257/aer.20170413

Volume

108

Issue

10

Pages

3104-3113

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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