• Login
View Item 
  • DASH Home
  • Harvard Kennedy School
  • HKS Center for International Development
  • View Item
  • DASH Home
  • Harvard Kennedy School
  • HKS Center for International Development
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

Browse

All of DASH
  • Communities & Collections
  • By Issue Date
  • Author
  • Title
  • Keyword
  • FAS Department
This Collection
  • By Issue Date
  • Author
  • Title
  • Keyword

Submitters

  • Login
  • Quick submit
  • Waiver Generator

About

  • About DASH
  • DASH Stories
  • DASH FAQs
  • Accessibility
  • COVID-related Research
  • Terms of Use
  • Privacy Policy

Statistics

  • By Schools
  • By Collections
  • By Departments
  • By Items
  • By Country
  • By Authors

Consumption Smoothing and Household Responses: Evidence from Random Exogenous Health Shocks

 
Thumbnail
View/Open
023.pdf (340.3Kb)
Author
Mohanan, Manoj
Published Version
https://www.hks.harvard.edu/centers/cid/publications/fellow-graduate-student-working-papers
Metadata
Show full item record
Citation
Mohanan, Manoj. “Consumption Smoothing and Household Responses: Evidence from Random Exogenous Health Shocks.” CID Graduate Student and Postdoctoral Fellow Working Paper Series 2008.23, Harvard University, Cambridge, MA, January 2008.
Abstract
Endogeneity in the health-wealth relationship is one of the biggest challenges in studying the causal effect of health on household consumption, wealth and labor responses. Using a novel study design, I present new evidence of causal effects of health shocks on consumption smoothing, household assets and debt. The empirical strategy relies on exogenous health shocks suffered as passengers injured in bus accidents, with "controls" drawn from travelers on the same bus routes, matched on age, gender and residential area. The matching strategy ensures that the exogenous health shocks from the bus accident are random, conditional upon matching. Using data from my household survey conducted one year after the accidents, I find evidence of imperfect consumption smoothing and large effects on household debt. Debt was the principal mechanism used by households to mitigate effects of the shock. The shock related expenses, equal on average to two months of household income, caused exposed households to reduce educational expenditures by roughly 20% and festival expenses by 9%. I find that the odds of having debt among exposed households were five times higher and the average size of debt was almost twice as much compared to the unexposed.
Terms of Use
This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page
https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37366515

Collections
  • HKS Center for International Development [465]

Contact administrator regarding this item (to report mistakes or request changes)

Follow us on TwitterFollow us on FacebookFollow us on Google+

e: osc@harvard.edu

t: +1 (617) 495 4089

f: +1 (617) 495 0370

© 2018 President and Fellows of Harvard College
  • DASH
  • ETDs@Harvard
  • Copyright First Responders
  • HOPE
  • Contact
  • Harvard Library
  • Harvard University