Details

Autor(en) / Beteiligte

• SHENOY, AJAY

Titel

Risky Income or Lumpy Investments? Evidence on Two Theories of Underspecialization

Ist Teil von

• Economic development and cultural change, 2018-07, Vol.66 (4), p.629-671

Ort / Verlag

Chicago: The University of Chicago Press

Erscheinungsjahr

2018

Link zum Volltext

Quelle

EBSCOhost Business Source Ultimate

Beschreibungen/Notizen

• Why do the poor have so many economic activities? According to one theory, the poor do not specialize because relying on one income source is risky. I test the theory by measuring the response of Thai rice farmers to conditional volatility in the international rice price. Households expecting a harvest take on one extra activity when the volatility rises by 21%. I confirm that the decrease in specialization costs households foregone revenue. I find no evidence to back a second theory in which households underspecialize because they cannot afford lumpy business investments.