Economic Analysis of Social Networks: Empirical Study on Selected Women Iddir in Addis Ababa
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Date
2000-06
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A.A.U
Abstract
By describing and singling out the economic features of Women Iddir, the study
attempts to review and associate the literature on in formal insurance and social capital.
It provides a framework of theoretical analysis and empirical results based on
descriptive as well as econometric methods. The study brought out the uninterrupted
social welfare service of Women Iddir that existed for about 60 years. Besides
demonstrating its effective informal insurance service in Ethiopia, it reveals that age,
education, premium and economic rational significantly explain the demand for funeral
cover. Financial capacity and social rational influence efficiency of networks positively
while reciprocity and membership to other forms of networks induce negative effect.
Results indicate the existence of certain optimal level of informal insurance purchase
by a risk averse person.
It is found reasonable to discern that certain level of explicit and implicit economic
rationale exist behind Women lddir that mostly are considered as altruistic, traditional,
humanitarian, welfare, etc. Although networks are incepted in social and moral
contexts, their resource base, welfare services and functions provide adequate
justification to consider them as economic institution. Their informal nature and
sustained service is the result of using mixed (non pure) strategies based on best
alternatives, which are partial contract, partial economic rational and with strong
reciprocal exchange and social objective.
The exposure to non-home activities and recognition of wide range of risks enabled
women to broaden the informal insurance cover. The non-marketable and efficient
service offered by Women Tddir makes the potential of its substitutability far reaching.
Instead, it has developed great potential to diversify the social welfare services if
technical, material and financial backing is availed for them to develop and assume
larger societal responsibilities. In spite of their own institutional development,
recognition of Women Tddir's informal insurance/social welfare services deserves
accounting their economic role in the society. Thus, studies on consumption and
expenditure need to account their role in the households' economy and provide
information for planning.
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Keywords
Social Networks, Selected Women Iddir