We study the impact of incomplete consumption risk-sharing on land misallocation in rural economies. We develop a general equilibrium model of land cultivation choices, where heterogeneous agricultural households face idiosyncratic output shocks and insure themselves by participating in a...

Insurance can encourage the use of risk-increasing inputs, but it can also decrease people's incentives to exert effort when it is difficult to monitor how much they exert themselves. This effort reduction can go hand in hand with a decrease in the use of effort-complementary inputs. I study a...

We argue that capital misallocation arises endogenously due to incomplete consumption insurance. We model risk-averse entrepreneurs with heterogeneous productivity who face idiosyncratic output shocks and choose how much capital to rent before uncertainty unfolds. We show that incomplete markets...

We argue that capital misallocation arises endogenously due to incomplete consumption insurance. We model risk-averse entrepreneurs with heterogeneous productivity who face idiosyncratic output shocks and choose how much capital to rent before uncertainty unfolds. We show that incomplete markets...

We study the impact of incomplete consumption risk-sharing on land misallocation in rural economies. We develop a general equilibrium model of land cultivation choices, where heterogeneous agricultural households face idiosyncratic output shocks and insure themselves by participating in a...

We study how inheriting parents’ credit histories affects credit scores, access to credit, and subsequent experiences of young indi- viduals entering the credit market. First, having an inherited credit history significantly positively affects credit scores at entry. Second, initial credit...