Food Versus Non-Food Consumption Insurance in Uganda

Master Thesis CEMFI No. 1601

Testing Limited Commitment: Food vs Non-Food Insurance in Rural Uganda

Abstract

“Households’ income fluctuations in poor countries call for risk smoothing mechanisms, yet insurance is always found to be incomplete. We build a two-goods complete markets model, and confirm this result with the UNPS - a new representative Uganda household-level panel data. The empirical evidence suggests that the degree of consumption insurance differs across consumption goods: Households insure food better than other non-durables. This finding has potential policy implications (e.g., consumption-item specific such as food coupons).”

Stefano Pica
Stefano Pica
Research Fellow @ Bank of Italy

I am an applied macroeconomist interested in monetary policy, household finance, and real estate.