@article{Richter:6261,
      recid = {6261},
      author = {Richter, Susan M.},
      title = {The Insurance Role of Remittances on Household Credit  Demand},
      address = {2008},
      number = {382-2016-22463},
      series = {Selected Paper},
      pages = {61},
      year = {2008},
      abstract = {The economic literature has highlighted how in the absence  of income insurance risk averse households may voluntarily  withdraw from credit markets, since contract terms may  transfer too much risk to the household (Boucher, Carter,  and Guirkinger, 2007). Therefore, households may forgo  activities with higher expected income in favor of  activities with less income variability across states of  nature (Morduch, 1995). Recent literature has also  evaluated how remittances provide households with insurance  against income shocks (Yang and Choi, 2007; Rosenzweig and  Stark, 1989) and how remittances may help households bypass  financial intermediaries (Woodruff and Zenteno, 2001;  Taylor, Rozelle, and de Brauw, 2003). There has been  minimal attention, however, on how access to the potential  receipt of remittances affects household participation in  financial credit markets. On the one hand, the direct  effect of remittances might decrease liquidity constraints  at the household level and thus decrease credit demand. On  the other hand remittances may provide households with  insurance and thus increase willingness to accept credit  contract terms. In this paper I estimate the effect of the  potential receipt of remittances on credit demand.  Potential 
receipt of remittances is estimated by  predicting the household's receipt of remittances and  variables that proxy for the strength and vulnerability of  migration networks. Results indicate that the predicated  amount of remittances received at the household level have  a positive effect on credit demand.},
      url = {http://ageconsearch.umn.edu/record/6261},
      doi = {https://doi.org/10.22004/ag.econ.6261},
}