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Sikandra Kurdi - Research Summary

Paris School of Economics

Store Credit as Informal Insurance in Rural Yemen

The ability of households in rural Yemen to buy staple food items on credit with exible repayment and no interest charges can be modeled as an interlinked transaction where store owners offer an implicit insurance product to loyal customers. This informal insurance system plays a significant role in the food security of vulnerable households. It also explains the finding that a randomized anti-poverty intervention in Yemen decreased prices for staple foods while increasing both incomes and demand.

The paper is still undergoing revisions but a working paper can be downloaded here.