Testing Efficient Risk Sharing with Heterogeneous Risk Preferences: Comment
Aditya Shrinivas, Marcel Fafchamps
American Economic Review · 2018 · Volume 108 · Issue 10
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 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.
Keywords
Consumer Economics: Empirical Analysis, Criteria for Decision-Making under Risk and Uncertainty, Insurance, Insurance Companies, Actuarial Studies, Microeconomic Analyses of Economic Development, Economic Development: Urban, Rural, Regional, and Transportation Analysis, Housing, Infrastructure, Urban, Real Estate, and Transportation Economics: Regional Migration, Regional Labor Markets, Population, Neighborhood Characteristics, Economic Sociology, Economic Anthropology, Language, Social and Economic Stratification
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