Rotating Savings And Credit Associations When Participants Are Risk Averse
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Rotating Savings And Credit Associations When Participants Are Risk Averse
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Author : Stefan Klonner
language : en
Publisher:
Release Date : 2003
Rotating Savings And Credit Associations When Participants Are Risk Averse written by Stefan Klonner and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with categories.
We model rotating savings and credit associations (Roscas) among risk-averse participants who experience privately observed income shocks. A random Rosca is not advantageous, whereas a bidding Rosca is if temporal risk aversion is less pronounced than static risk aversion. The payoff scheme of a bidding Rosca facilitates risk sharing in the presence of information asymmetries. The risk-sharing performance of a simple arrangement where a group of homogenous individuals runs several bidding Roscas simultaneously is as good as that of a linear risk-sharing contract, and is more enforceable because it carries a fixed rather than a variable contribution.
Essays On Rotating Savings And Credit Associations
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Author :
language : en
Publisher:
Release Date : 2001
Essays On Rotating Savings And Credit Associations written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with categories.
Recent theoretical research on rotating savings and credit associations (Roscas) suggests that identical individuals prefer a random to a bidding Rosca when participants save for a lumpy durable or an investment good. Here, in contrast, under the assumption that Rosca funds are used for consumption, that participants are risk averse, and that their incomes are stochastic, independent and privately observed, it is shown that a random Rosca is not advantageous, while a bidding Rosca is so if temporal risk aversion is less pronounced than static risk aversion. The payoff scheme of a bidding Rosca helps to mitigate the problem of information asymmetries. In bidding Roscas, the intertemporal pattern of observed bids depends on impatience and risk aversion in a non-trivial way. In an empirical study, data from 23 rotating savings and credit associations (Roscas) in an agricultural south-Indian village are used for an analysis of Rosca auctions. We develop a simple SIPV Rosca-auction model. We show that, in contrast to standard SIPV English auctions, bidders overbid relative to their maximum willingness to pay in an oral ascending bid Rosca auction and that less aggressive bidding is socially beneficial. Estimating the structural model by maximum likelihood, we find that (i) aggregate features immanent in agricultural production are reflected by Rosca auction outcomes, (ii) bidding in Rosca groups of experienced organisers is less aggressive than in groups of newcomer-organisers, implying that Rosca organisers play a role in how socially beneficial a Rosca is, (iii) bidding in Rosca groups which have run more than one Rosca before tends to be less aggressive, indicating social gains from enduring relationships, (iv) when Rosca funds are used for productive purposes, bidders usually keep their information private, (v) when a bidder has an?emergency? and this information is revealed, bidding is less aggressive indicating co-operation among bidders based on reciprocity.
Rosca Meets Formal Credit Market
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Author :
language : en
Publisher:
Release Date : 2015
Rosca Meets Formal Credit Market written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
Rotating Savings and Credit Association (Rosca) is an important informal financial institution in many parts of the world used by participants to share income risks. What is the role of Rosca when formal credit market is introduced? We develop a model in which risk-averse participants attempt to hedge against their private income shocks with access to both Rosca and the formal credit and investigate their interactions. Using the gap of the borrowing and saving interest rates as a measure of the imperfectness of the credit market, we compare three cases: (i) Rosca without credit market; (ii) Rosca with a perfect credit market; (iii) Rosca with an imperfect credit market. We show that a perfect credit market completely crowds out the role of Rosca. However, when credit market is present but imperfect, we show that Rosca and the formal credit market can complement each other in improving social welfare. Interestingly, we find that the social welfare in an environment with both Rosca and formal credit market does not necessarily increase monotonically as the imperfectness of the credit market converges to zero.
Group Decision And Negotiation Behavior Models And Support
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Author : Danielle Costa Morais
language : en
Publisher: Springer
Release Date : 2019-05-31
Group Decision And Negotiation Behavior Models And Support written by Danielle Costa Morais and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-05-31 with Computers categories.
This book constitutes the refereed proceedings of the 19th International Conference on Group Decision and Negotiation, GDN 2019, held in Loughborough, UK, in June 2019. The field of Group Decision and Negotiation focuses on decision processes with at least two participants and a common goal but conflicting individual goals. Research areas of Group Decision and Negotiation include electronic negotiations, experiments, the role of emotions in group decision and negotiations, preference elicitation and decision support for group decisions and negotiations, and conflict resolution principles. The 17 full papers presented in this volume were carefully reviewed and selected from 98 submissions. They were organized in topical sections named: preference modeling for group decision and negotiations; collaborative decision making processes; conflict resolution; behavioral OR, and negotiation support systems and studies.
The Influence Of Financial Relations On Sustaining Rural Livelihood In Sudan
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Author : Gihan Adam Abdalla
language : en
Publisher: LIT Verlag Münster
Release Date : 2013
The Influence Of Financial Relations On Sustaining Rural Livelihood In Sudan written by Gihan Adam Abdalla and has been published by LIT Verlag Münster this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with Business & Economics categories.
This book started with a vision to portray Sudanese rural livelihood and question whether microfinance is able to sustain rural living. The village of Al Dagag, in the North Kordofan state of Sudan, was chosen to be the research case study. However, further questions arose due to using the inductive methodology of Grounded Theory. Throughout the entire research process, different categories emerged from the data, which conceptualize the perspective of the rural people on livelihood, microfinance, and financial institutions. The path to remodel the livelihood approach led to including new determinants. (Series: Spectrum. Berlin Series on Society, Economy and Policy in Developing Countries / Spektrum. Berliner Reihe zu Gesellschaft, Wirtschaft und Politik in Entwicklungslandern - Vol. 108)
Transforming Africa
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Author : Dana T. Redford
language : en
Publisher: Emerald Group Publishing
Release Date : 2022-01-26
Transforming Africa written by Dana T. Redford and has been published by Emerald Group Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022-01-26 with Business & Economics categories.
Transforming Africa: How Savings Groups Foster Financial Inclusion, Resilience and Economic Development presents in-depth empirical research into current day savings group activities across Africa, exploring savings groups through the lens of financial inclusion and reflecting on formal finance, economic and social outcomes.
You Can T Save Alone
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Author : Mary Kay Gugerty
language : en
Publisher:
Release Date : 2013
You Can T Save Alone written by Mary Kay Gugerty and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
This paper examines one reason why individuals develop and maintain local-level financial savings organizations known as rotating savings and credit organizations, or roscas. Economic theories suggest that individuals form roscas to finance the purchase of a lumpy durable good, in response to intrahousehold conflict over savings, or to provide themselves with insurance. The paper proposes an additional hypothesis for rosca participation: saving requires discipline and some roscas may be formed to provide a collective mechanism for commitment in the presence of time-inconsistent preferences. Data from 70 roscas located in western Kenya indicate that the commitment hypothesis is plausible and broadly consistent with the design and patterns of participation in these roscas. As many rosca participants put it: “you can't save alone”
Community Economies In The Global South
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Author : Caroline Shenaz Hossein
language : en
Publisher: Oxford University Press
Release Date : 2022-01-04
Community Economies In The Global South written by Caroline Shenaz Hossein and has been published by Oxford University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022-01-04 with Business & Economics categories.
People across the globe engage in social and solidarity economics to help themselves, their community, and society on their own terms. Community Economies in the Global South examines how people who conscientiously organize rotating savings and credit associations (ROSCAs) bring positive changes to their own lives as well as others. ROSCAs are a long-established and well documented practice, especially those organized by women of colour. Members make regular deposits to a fund as a savings that is then given in whole or in part to each member in turn based on group economics. This book spotlights women in Latin America, the Caribbean, Africa, and Asia who organize and use these associations, composed of ordinary people belonging to similar class origins who decide jointly on the rules to suit the interests of their members. The case studies show how they vary greatly across countries in the Global South, demonstrating that ROSCAs are living proof that diverse community economies do exist and have been around for a very long time. The contributors recount stories of the self-help, activism, and perseverance of racialized people in order to push for ethical, community-focused business, and to hold onto local knowledge, grounded theory, and lived experience, reducing the need to rely on external funding as people find ways to finance sustainable, debt-free business ventures. The first collection on this topic edited by two women of colour with roots in the Global South, this volume is a rallying call to other scholar-activists to study and report on how racialized people come together, pool goods, and diversify business in the Global South.
A Bibliographical Survey Of Rotating Savings And Credit Associations
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Author : Alaine Low
language : en
Publisher:
Release Date : 1995
A Bibliographical Survey Of Rotating Savings And Credit Associations written by Alaine Low and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1995 with categories.
The Economics Of Rotating Savings And Credit Associations
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Author : Timothy Besley
language : en
Publisher:
Release Date : 1990
The Economics Of Rotating Savings And Credit Associations written by Timothy Besley and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1990 with Credit categories.
This paper examines the role and performance of an institution for allocating savings which is observed world wide - rotating savings and credit associations. We develop a general equilibrium model of an economy with an indivisible durable consumption good and compare and contrast these informal institutions with credit markets and autarkic saving in terms of the properties of their allocations and the expected utility which they obtain. We also characterize Pareto efficient and expected utility maximizing allocations for our economy, which serve as useful benchmarks for the analysis. Among our results is the striking finding that rotating savings and credit associations which allocate funds randomly may sometimes yield a higher level of expected utility to prospective participants than would a perfect credit market.