Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/198956
Authors: 
Anderberg, Dan
Marsink, Karlijn
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper 7596
Abstract: 
Transfers motivated by altruism, norms of giving, and guilt play an important role in supporting individuals who suffer losses due to risk. We present empirical evidence from an artefactual field experiment in Ethiopia in which we introduce formal insurance in a setting where donors make redistributive transfers to anonymously paired recipients. We find that donors reduce their transfers to recipients who don’t take-up insurance, and that this effect is larger for donors who hold the ex ante belief that the recipient is more likely to take-up insurance. The findings are consistent with a model of a norm of giving where donors feel guilty for deviating from the norm. The feelings of guilt decline with the expected social distance, that is revealed by the recipients’ observable insurance uptake decisions. The model highlights how the introduction of formal insurance may erode norms of giving and lead vulnerable groups to face more volatile consumption.
Subjects: 
formal insurance
transfers
norms of giving
guilt
social distance
JEL: 
D64
D91
G22
O16
O17
Document Type: 
Working Paper

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