The authors examine the importance of absolute income and relative deprivation incentives for internal and international migration in developing country households. Empirical results, based on Mexican village data, support the hypothesis that households'relative deprivation in the village...

Moral hazard and adverse selection impede the development of formal crop insurance markets in developing countries. Besides, the risk mitigation provided by informal risk-sharing arrangements is restricted by their inability to protect against covariate shocks. In this context, index-based...

We model the role of the informal credit sector in developing countries. The informational advantage of informal lenders is portrayed as the ability to monitor borrowers. Monitoring reduces the incentive problem and allows for contracts with lower collateral. This enables informal lenders to...