Does inequality impede risk management? Evidence from a lab experiment in Ghana
通过加纳的实验室实验，研究财富不平等如何通过公平偏好影响人际风险分担和正式保险需求，发现不平等减少了风险分担但增加了保险需求。
Abstract Low income households in agrarian developing economies face considerable livelihood risks, which have negative impacts on welfare. A growing literature focuses on internal constraints on development, which can negatively affect saving and investment behavior. Here I propose that internal constraints may also hinder risk management. Specifically, I present a theoretical model that explores how fairness preferences may create an internal constraint on risk sharing, particularly in a context of wealth inequality, and thereby also affect demand for formal insurance. To test this theory, I utilize a lab experiment, conducted in Ghana, to investigate the impact of wealth inequality on utilization of risk‐management tools, interpersonal risk sharing and formal insurance, and explore how fairness preferences may mediate this effect. I find that inequality reduces risk sharing and increases demand for insurance. Moreover, I find suggestive evidence that fairness preferences create an internal constraint on risk sharing under inequality.