One main advantage of having developed credit markets is that there are better opportunities of dealing with risk. This paper measures access to credit in rural India and the role of credit institutions as insurance mechanisms. I am able to do this by comparing data for 720 rural households that...

This paper examines the effects of income shock on savings decision of a household. In particular, it analyzes how an idiosyncratic income shock affects the asset portfolio held by a household. It shows that income volatility contributes to poverty of rural households by leading them to reduce...