摘要：The practice of mutual insurance is conditioned by two types of transaction costs:"association" costs in establishing links with insurance partners and "extraction" costs inusing these links to implement insurance transfers. Data on insurance-motivated waterexchanges among households along two irrigation canals in Pakistan show that householdsexchange bilaterally with neighbors and family members but the majority exchange withmembers of tightly knit clusters. We, therefore, develop a model that endogenizes bothcluster formation and the quality of insurance in the chosen cluster as a function of therelative importance of association and extraction costs. Full insurance at the communitylevel, the object of most empirical tests of mutual insurance, is seen to be an extreme case.It is consequently not surprising that tests of the hypothesis of full risk pooling at thecommunity level have led to rejection. The Pakistan data support the proposition that theconfiguration of insurance clusters and the intensity of exchanges within clusters vary withassociation and extraction costs. These costs are affected by kinship, distance to neighbors,and exposure to risk. Households with larger kinship groups, closer neighbors, and greaterrisk exposure insure through larger clusters and more intensive exchange.
