Risk Sharing in Rural and Urban Areas in Thailand

Abstract

This study tests the full insurance model using panel data taken from the Townsend Thai Data, which was collected annually between 2005 and 2009 in six provinces in four regions of Thailand. The full insurance model is statistically rejected in most of regions and provinces; however, Thais in rural areas share risks better than those in urban areas in most of the country’s regions and provinces. The findings show that there are statistical differences in risk sharing in various occupations and types of work, but that no one in any urban area is better at risk sharing than those who live in rural areas.