Fed Features Townsend Research in Article on Thai Village Life

The Rich Complexity of Village Life
June 1, 2011

The Region (Federal Reserve Bank of Minneapolis)

The Federal Reserve Bank of Minneapolis published an extensive article highlighting the initial findings of CFSP Faculty Director Robert M. Townsend and co-authors Pierre-Andre Chiappori, Krislert Samphantharak, and Sam Schulhofer-Wohl in a working paper on risk sharing in Thai villages.

Author and Region editor Douglas Clement notes, “A number of households, the researchers indicate, might actually benefit from volatility in village income. A government program such as crop insurance could therefore have an adverse impact on some. ‘If aggregate risk were eliminated,’ write the researchers, ‘some relatively risk-tolerant households would suffer welfare losses.’”

The article summarizes the household behavior and circumstances that influence variability and risk sharing in Thai villages.

(Paper cited in this article: Heterogeneity and Risk Sharing in Village Economies.)