Crowding-Out or Crowding-In? Heterogeneous Effects of Insurance on Solidarity

87 Pages Posted: 15 Sep 2020

See all articles by Andreas Landmann

Andreas Landmann

University of Mannheim; Paris School of Economics (PSE)

Ni Wayan Rustiarini

University of Marburg

Karla Henning

Kreditanstalt für Wiederaufbau (KFW) - KfW Development Bank

Markus Frölich

Universität Mannheim, Chair of Econometrics

Abstract

We analyze whether the availability of formal insurance products affects informal solidarity transfers in two independent behavioral experiments in the Philippines. The first experiment allows for communication, non-anonymity and unrestricted transfers. The second experiment mimics a laboratory setting without communication and preserves anonymity, which minimizes strategic concerns. The introduction of an insurance treatment alters solidarity in both experiments. We find crowding-out effects in the first setting with strategic motives, while there are even crowding-in effects due to insurance availability in the anonymous experiment. These and additional supporting results are in line with crowding-out of strategic, but not necessarily intrinsic motives due to the availability of insurance.

Keywords: insurance, solidarity, crowding effects, lab-in-the-field experiment, Philippines

JEL Classification: O12, Z13

Suggested Citation

Landmann, Andreas and Landmann, Andreas and Rustiarini, Ni Wayan and Henning, Karla and Frölich, Markus, Crowding-Out or Crowding-In? Heterogeneous Effects of Insurance on Solidarity. IZA Discussion Paper No. 13688, Available at SSRN: https://ssrn.com/abstract=3691401 or http://dx.doi.org/10.2139/ssrn.3691401

Andreas Landmann (Contact Author)

University of Mannheim ( email )

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Ni Wayan Rustiarini

University of Marburg

Karla Henning

Kreditanstalt für Wiederaufbau (KFW) - KfW Development Bank

Markus Frölich

Universität Mannheim, Chair of Econometrics ( email )

L7, 3-5
68131 Mannheim
D-Mannheim, 68131
Germany

HOME PAGE: http://froelich.vwl.uni-mannheim.de

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