We develop a model of sorting and matching between borrowers and lenders across formal and informal credit markets in a developing country context. We highlight the role of risk both on credit access and sectoral choice. We examine how activity and sectoral choice vary across agents with...

This paper evaluates the performance of a rural credit market in Peru. We develop a model that shows that collateral requirements imposed by lenders in response to asymmetric information can lead not just to quantity rationing but also to transaction cost rationing and risk rationing. Just like...

The material contained herein is supplementary to the article named in the title and published in the American Journal of Agricultural Economics.

Replaced with revised version of paper 07/20/10.

The effective design and implementation of interventions that reduce vulnerability and poverty require a solid understanding of underlying poverty dynamics and associated behavioral responses. Stochastic and dynamic benefit streams can make it difficult for the poor to learn the value of such...