1. Economic Transfers Through Social Networks and Financial Trickle Down in Kenya’s Smallholder Sector Heidi Hogset Ph.D. candidate, Cornell University USAID SAGA Project Policy Conference February 10, 2005

2. Overall Objective of the Study Determine how social networks interact with people’s ability or willingness to adopt beneficial technologiesDetermine how social networks interact with people’s ability or willingness to adopt beneficial technologies Identify what are the most important channels for network effects on technology adoptionIdentify what are the most important channels for network effects on technology adoption

3. Network Services Informal finance that may substitute or complement formal sources of credit and insuranceInformal finance that may substitute or complement formal sources of credit and insurance Dissemination of information and transmission of social norms regarding “good” farming practicesDissemination of information and transmission of social norms regarding “good” farming practices Mobilization of affected individuals in need of coordination and/or cooperationMobilization of affected individuals in need of coordination and/or cooperation

4. Hypotheses Informal finance through social networks is associated with social norms that can be rationalized as responses to problems with moral hazard.Informal finance through social networks is associated with social norms that can be rationalized as responses to problems with moral hazard. Such norms force net borrowers to exhibit more risk averse (“conservative”) behavior than net lenders.Such norms force net borrowers to exhibit more risk averse (“conservative”) behavior than net lenders.

5. Network Data Membership in merry-go-roundsMembership in merry-go-rounds Transfers – quantities and reasonsTransfers – quantities and reasons Demographic data about borrower and lender (or recipient and provider – some transfers are regarded as gifts, not loans)Demographic data about borrower and lender (or recipient and provider – some transfers are regarded as gifts, not loans) First- and second-order egocentric network dataFirst- and second-order egocentric network data –Network structure –Measures of network structure and “importance” of network members

6. Research Questions Who are members of merry-go-roundsWho are members of merry-go-rounds Who provide transfers in cash, in kind, and as exchange labor bilaterally through social networks, and to whomWho provide transfers in cash, in kind, and as exchange labor bilaterally through social networks, and to whom Who provide larger amounts or higher-value transfers, on what terms, and to whomWho provide larger amounts or higher-value transfers, on what terms, and to whom

7. Model I A social network member goes through a two- stage decision process, where s/he first decides whether to participate in economic transfers with a particular person, then, if the first decision is positive, decides the level of transfers provided to that personA social network member goes through a two- stage decision process, where s/he first decides whether to participate in economic transfers with a particular person, then, if the first decision is positive, decides the level of transfers provided to that person

8. Model II Both participation in transfers and levels of transfers are assumed to be functions ofBoth participation in transfers and levels of transfers are assumed to be functions of –Characteristics of the recipient –Characteristics of the provider –Characteristics of the relationship between them Levels of transfers are also assumed to be a function of the professed purpose of the transferLevels of transfers are also assumed to be a function of the professed purpose of the transfer

9. Merry-go-rounds I Coef.Std. Err.zP>|z| Intercept-2.1920.927-2.360.018 Embu0.2330.3920.590.553 Respondent characteristics Female0.9520.2334.080.000 Household head0.3740.2151.740.081 Age 20020.0430.0391.110.268 Age 2002 squared-0.0010.000-1.470.142 Household head has always lived here-0.1090.213-0.510.609 Network density0.0440.0281.610.108 No formal education-0.2940.308-0.950.340 Finished secondary school or more0.4880.2002.450.014 Finished technical school, college or more0.0640.3940.160.872

10. Merry-go-rounds II Coef.Std. Err.zP>|z| Owns own land holding-0.2530.192-1.320.187 Area of cultivated land0.1620.1301.250.210 Area of cultivated land squared-0.0190.016-1.200.229 Proportion of cultivated land under tea-0.3150.531-0.590.553 Proportion of cultivated land under coffee-0.2900.614-0.470.636 No. of days/month working on family farm-0.0020.016-0.130.893 HH member is member of local savings inst.0.2720.3000.910.364 HH member has a savings account in bank-0.5300.301-1.760.078 HH member has received a loan last 5 years0.0640.2200.290.772 Not recovered from recent shock0.0410.2000.210.836 Frequency not assisted in emergencies0.0270.0380.700.485 Risk neutral0.0010.1930.010.994

11. Cash Participation I Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| PARTICIPATION IN CASH TRANSFERS Intercept0.4990.4501.110.2670.3880.4470.870.385 Embu-0.2460.185-1.330.184-0.0760.181-0.420.674 Recipient characteristics Female-0.1270.117-1.090.275 Household head0.0380.1160.320.745 Age 2002-0.0180.017-1.040.297 Age 2002 squared0.000 0.650.513 Household head has always lived here-0.0620.106-0.580.560 Network density-0.0410.015-2.810.005 No formal education-0.0420.125-0.340.737 Finished secondary school or more-0.3000.114-2.640.008 Finished technical school, college or more0.3020.2251.340.180

12. Cash Participation II Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Owns own land holding-0.2730.105-2.610.009 Area of cultivated land0.0400.0610.660.507 Area of cultivated land squared-0.0100.007-1.580.113 Proportion of cultivated land under tea0.0340.2530.130.894 Proportion of cultivated land under coffee0.1390.2690.520.604 No. of days/month working on family farm0.0180.0082.210.027 Number of merry-go-rounds-0.0630.042-1.480.140 HH member is member of local savings inst.0.2130.1291.650.099 HH member has a savings account in bank-0.0190.139-0.140.889 HH member has received a loan last 5 years0.0240.1070.220.824 Not recovered from recent shock0.0480.1020.470.639 Frequency not assisted in emergencies-0.0030.021-0.120.903 Risk neutral0.0960.0911.060.291

13. Cash Participation III Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Teacher-0.2570.179-1.440.151 Priest, preacher or missionary-0.0590.295-0.200.841 Extension officer, vet or ag.coop. rep.-0.4880.309-1.580.114 Civil servant or military officer-0.1700.166-1.030.304 Business owner, shopkeeper or petty trader-0.1520.138-1.110.269 Village chief or elder0.2310.4040.570.568 Politician or spokesperson-0.7890.542-1.460.145 Provider characteristics Female-0.2440.117-2.080.037 Household head0.0470.1180.400.691 Age 2002-0.0040.017-0.250.804 Age 2002 squared0.000 -0.430.666 Household head has always lived here-0.1380.106-1.310.191 Network density-0.0550.015-3.760.000 No formal education0.0210.1240.170.867 Finished secondary school or more0.0430.1100.390.695 Finished technical school, college or more0.4060.2101.930.054

14. Cash Participation IV Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Owns own land holding-0.3330.104-3.190.001 Area of cultivated land0.0910.0521.770.076 Area of cultivated land squared-0.0050.004-1.270.206 Proportion of cultivated land under tea0.2430.2550.960.339 Proportion of cultivated land under coffee0.7680.2592.970.003 No. of days/month working on family farm-0.0080.008-0.970.334 Number of merry-go-rounds0.0240.0410.580.564 HH member is member of local savings inst.-0.0510.128-0.400.690 HH member has a savings account in bank0.1110.1390.800.426 HH member has received a loan last 5 years-0.0360.103-0.350.726 Not recovered from recent shock0.0600.0990.600.547 Frequency not assisted in emergencies-0.0040.021-0.210.835 Risk neutral0.4840.0895.420.000

15. Cash Participation V Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Teacher0.8330.1744.800.000 Priest, preacher or missionary0.0130.2630.050.960 Extension officer, vet or ag.coop. rep.-0.2070.322-0.640.521 Civil servant or military officer0.4710.1563.030.002 Business owner, shopkeeper or petty trader0.4140.1313.170.002 Village chief or elder0.6770.3951.710.087 Politician or spokesperson-0.4530.476-0.950.342 Reciprocal characteristics Distance (kms)0.0030.0022.260.0240.0150.0230.670.500 Distance (kms) squared0.000 -1.470.1410.000 -1.040.300 Family member0.4540.0875.190.0000.4640.0875.360.000 Same sex0.2230.0892.500.0120.2320.0882.630.008 Neighbor-2.2050.131-16.850.000-1.7780.117-15.190.000 "Friend"-1.8010.121-14.900.000-1.4240.112-12.670.000 Multiplex relationship2.4060.13717.520.0002.1430.12716.870.000

16. Kind Participation I Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| PARTICIPATION IN TRANSFERS IN KIND Intercept0.4480.4401.020.3080.0950.4390.220.829 Embu0.1950.1771.100.2710.3430.1791.910.056 Recipient characteristics Female0.3910.1133.450.001 Household head0.2360.1132.080.038 Age 2002-0.0260.016-1.600.109 Age 2002 squared0.000 1.140.253 Household head has always lived here0.0450.1010.450.654 Network density-0.0500.014-3.510.000 No formal education0.1010.1200.850.397 Finished secondary school or more-0.0580.109-0.540.591 Finished technical school, college or more-0.3210.217-1.480.139

17. Kind Participation II Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Owns own land holding0.1430.1031.390.163 Area of cultivated land0.0930.0511.820.069 Area of cultivated land squared-0.0060.004-1.580.114 Proportion of cultivated land under tea0.2490.2471.010.315 Proportion of cultivated land under coffee0.4340.2621.660.098 No. of days/month working on family farm0.0160.0082.000.046 Number of merry-go-rounds-0.0810.041-1.970.049 HH member is member of local savings inst.-0.3670.126-2.910.004 HH member has a savings account in bank0.1200.1350.890.372 HH member has received a loan last 5 years0.0070.1030.070.945 Not recovered from recent shock0.0650.1000.650.514 Frequency not assisted in emergencies-0.0330.021-1.580.114 Risk neutral0.1420.0901.580.115

18. Kind Participation III Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Teacher-0.0570.178-0.320.750 Priest, preacher or missionary-0.2140.276-0.770.439 Extension officer, vet or ag.coop. rep.-0.6650.286-2.330.020 Civil servant or military officer0.0450.1610.280.779 Business owner, shopkeeper or petty trader-0.0900.134-0.670.501 Village chief or elder-0.2050.395-0.520.604 Politician or spokesperson-0.4080.485-0.840.400 Provider characteristics Female0.1760.1131.560.118 Household head0.1010.1140.890.372 Age 2002-0.0080.016-0.470.640 Age 2002 squared0.000 0.330.739 Household head has always lived here-0.0980.101-0.970.332 Network density-0.0460.014-3.240.001 No formal education0.1730.1201.430.151 Finished secondary school or more0.0600.1090.550.583 Finished technical school, college or more-0.3550.213-1.670.095

19. Kind Participation III Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Owns own land holding0.0880.1030.850.395 Area of cultivated land0.0150.0510.300.764 Area of cultivated land squared0.0000.0040.070.947 Proportion of cultivated land under tea0.3050.2461.240.215 Proportion of cultivated land under coffee0.5950.2742.170.030 No. of days/month working on family farm0.0200.0082.590.010 Number of merry-go-rounds-0.0290.041-0.700.485 HH member is member of local savings inst.-0.0390.124-0.310.753 HH member has a savings account in bank-0.1260.135-0.940.349 HH member has received a loan last 5 years0.1270.1041.230.221 Not recovered from recent shock-0.0200.100-0.200.840 Frequency not assisted in emergencies-0.0060.021-0.280.779 Risk neutral0.2370.0902.650.008

20. Kind Participation IV Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Teacher0.0340.1800.190.850 Priest, preacher or missionary-0.1270.264-0.480.629 Extension officer, vet or ag.coop. rep.-0.5340.289-1.850.065 Civil servant or military officer0.0120.1570.080.938 Business owner, shopkeeper or petty trader-0.0080.132-0.060.953 Village chief or elder-0.4130.394-1.050.295 Politician or spokesperson0.0880.4920.180.857 Reciprocal characteristics Distance (kms)-0.0010.001-0.520.601-0.0040.002-2.440.015 Distance (kms) squared0.000 0.520.6010.000 1.630.104 Family member0.2610.0873.010.0030.1830.0872.100.035 Same sex0.0580.0840.690.492-0.0300.085-0.350.727 Neighbor-2.1720.108-20.160.000-2.1930.106-20.590.000 "Friend"-2.1160.115-18.440.000-2.1920.116-18.830.000 Multiplex relationship2.9650.12723.300.0002.9070.12623.060.000

21. Cash Levels I Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Intercept740.914889.6210.830.405171.516523.6000.330.743 Embu1035.421425.2862.430.015372.533223.7191.670.097 Recipient characteristics Female140.451248.8200.560.573 Household head95.343254.4450.370.708 Age 20029.63834.3360.280.779 Age 2002 squared-0.1570.340-0.460.644 Household head has always lived here-188.032235.983-0.800.426 Network density-74.71032.785-2.280.023 No formal education74.520296.1020.250.801 Finished secondary school or more374.269239.3171.560.119 Finished technical school, college or more875.805494.2581.770.077

22. Cash Levels II Respondent is recipient Respondent is provider Coef. Std. Err.zP>|z|Coef.Std. Err.zP>|z| Owns own land holding36.923218.0280.170.866 Area of cultivated land-75.781192.519-0.390.694 Area of cultivated land squared24.79329.0040.850.393 Proportion of cultivated land under tea751.869542.0081.390.166 Proportion of cultivated land under coffee-56.121581.555-0.100.923 No. of days/month working on family farm-22.50117.243-1.300.193 Number of merry-go-rounds-139.40192.477-1.510.132 HH member is member of local savings inst.-482.371293.433-1.640.101 HH member has a savings account in bank-34.673313.590-0.110.912 HH member has received a loan last 5 years280.340237.3611.180.238 Not recovered from recent shock375.563214.1141.750.080 Frequency not assisted in emergencies-22.70347.067-0.480.630 Risk neutral95.577189.5800.500.614

23. Cash Levels III Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Teacher161.743210.9920.770.444 Priest, preacher or missionary121.865331.0320.370.713 Extension officer, vet or ag.coop. rep.654.952472.4681.390.166 Civil servant or military officer922.196200.9294.590.000 Business owner, shopkeeper or petty trader36.160168.7540.210.830 Village chief or elder80.833419.8460.190.847 Politician or spokesperson1472.773652.1792.260.024 Provider characteristics Female-137.072139.878-0.980.328 Household head140.695141.4790.990.321 Age 200253.88321.5152.500.013 Age 2002 squared-0.6510.215-3.030.003 Household head has always lived here-252.406144.520-1.750.081 Network density-44.96319.245-2.340.020 No formal education-148.047160.946-0.920.358 Finished secondary school or more-108.618132.163-0.820.412 Finished technical school, college or more51.615248.6190.210.836

24. Cash Levels IV Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Owns own land holding-193.181136.007-1.420.156 Area of cultivated land149.92962.3862.400.017 Area of cultivated land squared-8.5814.688-1.830.068 Proportion of cultivated land under tea305.542308.4620.990.323 Proportion of cultivated land under coffee17.741286.9730.060.951 No. of days/month working on family farm-39.0459.384-4.160.000 Number of merry-go-rounds-56.32549.221-1.140.253 HH member is member of local savings inst.-68.622164.249-0.420.676 HH member has a savings account in bank255.308181.1971.410.160 HH member has received a loan last 5 years-209.238122.165-1.710.088 Not recovered from recent shock-72.946120.764-0.600.546 Frequency not assisted in emergencies-18.43226.716-0.690.491 Risk neutral322.094114.5212.810.005

25. Cash Levels V Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Teacher531.114281.4851.890.060 Priest, preacher or missionary-89.430561.029-0.160.873 Extension officer, vet or ag.coop. rep.-273.822780.492-0.350.726 Civil servant or military officer926.118299.5093.090.002 Business owner, shopkeeper or petty trader610.427251.9312.420.016 Village chief or elder212.406663.7600.320.749 Politician or spokesperson439.9461006.2450.440.662

26. Cash Levels VI Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Reciprocal characteristics Distance (kms)3.1102.0491.520.130137.85538.5583.580.000 Distance (kms) squared0.000 -1.060.288-2.6950.883-3.050.002 Family member229.304177.6231.290.19744.547100.1410.440.657 Same sex-435.838193.510-2.250.025-17.808110.836-0.160.872 Neighbor-108.755407.335-0.270.790-215.642190.361-1.130.258 "Friend"-313.146417.540-0.750.45420.806193.3740.110.914 Multiplex relationship90.554471.2650.190.848114.650232.4070.490.622 Purposes of transfers Farm investment2051.299413.0024.970.000342.697331.2131.030.301 Farm input401.972278.0881.450.149191.427139.8231.370.172 Off-farm business3343.361756.6964.420.0002691.099316.6888.500.000 Residential building1761.5881729.2941.020.3091434.503469.3963.060.002 School fees2120.588302.3327.010.000778.135152.0245.120.000 Medicine334.976237.9021.410.16029.481142.0490.210.836 Ceremonial expenses-98.681383.373-0.260.797356.586218.0981.630.103

27. Kind Levels I Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Intercept940.315840.7521.120.2643.934152.2480.030.979 Embu-203.929408.912-0.500.618-285.83976.662-3.730.000 Recipient characteristics Female-194.943218.845-0.890.373 Household head-253.810221.226-1.150.252 Age 2002-63.46430.585-2.080.038 Age 2002 squared0.7840.2962.650.008 Household head has always lived here188.152209.3980.900.369 Network density26.59828.9800.920.359 No formal education-298.568228.066-1.310.191 Finished secondary school or more-34.192219.783-0.160.876 Finished technical school, college or more186.764459.2120.410.684

28. Kind Levels II Respondent is recipient Respondent is provider Coef. Std. Err.zP>|z|Coef.Std. Err.zP>|z| Owns own land holding6.004197.6240.030.976 Area of cultivated land-31.081100.291-0.310.757 Area of cultivated land squared1.8357.4580.250.806 Proportion of cultivated land under tea228.194473.4490.480.630 Proportion of cultivated land under coffee196.589473.6820.420.678 No. of days/month working on family farm17.98115.9051.130.259 Number of merry-go-rounds-8.19582.102-0.100.921 HH member is member of local savings inst.-49.273225.936-0.220.827 HH member has a savings account in bank165.687243.8240.680.497 HH member has received a loan last 5 years-56.887197.047-0.290.773 Not recovered from recent shock79.110187.5170.420.673 Frequency not assisted in emergencies14.63247.4220.310.758 Risk neutral-274.490173.026-1.590.113

29. Kind Levels III Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Teacher49.57656.4990.880.381 Priest, preacher or missionary-62.69699.608-0.630.529 Extension officer, vet or ag.coop. rep.-60.690148.907-0.410.684 Civil servant or military officer109.70852.4012.090.037 Business owner, shopkeeper or petty trader2.77147.0240.060.953 Village chief or elder-30.203134.507-0.220.822 Politician or spokesperson-13.780148.770-0.090.926 Provider characteristics Female-14.90637.142-0.400.688 Household head48.37938.4301.260.208 Age 20023.1435.3800.580.559 Age 2002 squared-0.0330.051-0.650.516 Household head has always lived here104.14036.4922.850.004 Network density-0.0214.8420.000.996 No formal education15.96437.8420.420.673 Finished secondary school or more50.42137.2931.350.177 Finished technical school, college or more263.31877.2963.410.001

30. Kind Levels IV Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Owns own land holding-55.93034.164-1.640.102 Area of cultivated land30.52917.4351.750.080 Area of cultivated land squared-1.5021.247-1.200.229 Proportion of cultivated land under tea134.09787.5051.530.126 Proportion of cultivated land under coffee94.24175.6861.250.213 No. of days/month working on family farm2.2172.7950.790.428 Number of merry-go-rounds15.05813.3631.130.260 HH member is member of local savings inst.-15.90539.028-0.410.684 HH member has a savings account in bank1.04841.4280.030.980 HH member has received a loan last 5 years25.95432.8600.790.430 Not recovered from recent shock24.12731.1350.770.439 Frequency not assisted in emergencies15.0817.6551.970.049 Risk neutral-37.43729.547-1.270.206

31. Kind Levels V Respondent is recipient Respondent is provider Coef. Std. Err.zP>|z|Coef.Std. Err.zP>|z| Teacher115.901329.1350.350.725 Priest, preacher or missionary - 327.765546.798-0.600.549 Extension officer, vet or ag.coop. rep. - 176.909791.110-0.220.823 Civil servant or military officer158.092313.1530.500.614 Business owner, shopkeeper or petty trader898.096266.9683.360.001 Village chief or elder - 165.984865.428-0.190.848 Politician or spokesperson - 552.334802.438-0.690.491

32. Kind Levels VI Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Reciprocal characteristics Distance (kms)1.7613.0220.580.560-19.2862.703-7.140.000 Distance (kms) squared0.000 -0.600.5480.2230.01120.980.000 Family member-7.378168.223-0.040.965-0.78528.778-0.030.978 Same sex-13.730167.900-0.080.93513.81528.1180.490.623 Neighbor-98.835334.689-0.300.768-70.13157.725-1.210.225 "Friend"75.814322.3420.240.814-15.63755.123-0.280.777 Multiplex relationship-80.828385.078-0.210.83472.00866.1691.090.277 Purposes of transfers Farm investment827.272621.9651.330.184250.02691.0662.750.006 Farm input-33.259268.187-0.120.90110.90553.5310.200.839 Off-farm business-137.924990.540-0.140.88931.252331.7770.090.925 Residential building233.1111113.0990.210.834-46.530337.489-0.140.890 School fees284.1941110.5940.260.798489.749164.4802.980.003 Medicine69.475481.4400.140.88520.20598.5930.200.838 Ceremonial expenses319.184425.3730.750.453419.08490.6274.620.000

33. Exchange Labor I Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Intercept-3.4300.469-7.310.000-2.3470.442-5.310.000 Embu-0.3510.150-2.350.019-0.2620.130-2.010.044 Recipient characteristics Female-0.0100.090-0.110.911 Household head0.1510.0901.680.092 Age 2002-0.0100.015-0.630.527 Age 2002 squared0.000 1.820.069 Household head has always lived here0.8060.1027.900.000 Network density-0.0080.012-0.630.531 No formal education0.4710.0905.220.000 Finished secondary school or more-0.1560.105-1.480.138 Finished technical school, college or more0.5080.1792.840.004

34. Exchange Labor II Respondent is recipient Respondent is provider Coef. Std. Err.zP>|z|Coef.Std. Err.zP>|z| Owns own land holding-0.1670.084-1.990.046 Area of cultivated land0.0810.0411.980.048 Area of cultivated land squared-0.0050.003-1.470.142 Proportion of cultivated land under tea1.1440.1816.330.000 Proportion of cultivated land under coffee1.2490.1667.530.000 No. of days/month working on family farm0.0540.0086.350.000 Number of merry-go-rounds0.4750.02817.130.000 HH member is member of local savings inst.0.0430.0980.430.664 HH member has a savings account in bank0.1840.1041.770.078 HH member has received a loan last 5 years0.3440.0754.590.000 Not recovered from recent shock-0.2220.080-2.790.005 Frequency not assisted in emergencies0.0300.0241.280.200 Risk neutral0.0170.0780.210.831

35. Exchange Labor III Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Teacher0.0210.1370.150.879 Priest, preacher or missionary-0.7780.342-2.280.023 Extension officer, vet or ag.coop. rep.-1.3220.364-3.630.000 Civil servant or military officer-0.0920.136-0.680.498 Business owner, shopkeeper or petty trader0.3020.1052.860.004 Village chief or elder-1.6340.505-3.240.001 Politician or spokesperson-0.2970.256-1.160.245 Provider characteristics Female-0.4410.093-4.730.000 Household head0.3230.0963.370.001 Age 2002-0.0090.016-0.550.580 Age 2002 squared0.000 -0.160.872 Household head has always lived here1.2390.10711.580.000 Network density-0.0420.012-3.480.001 No formal education0.1610.0971.660.096 Finished secondary school or more-0.1020.105-0.960.335 Finished technical school, college or more1.5360.15310.010.000

36. Exchange Labor IV Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Owns own land holding-0.1350.091-1.490.136 Area of cultivated land0.1510.0443.430.001 Area of cultivated land squared-0.0070.004-1.910.056 Proportion of cultivated land under tea2.2240.16613.380.000 Proportion of cultivated land under coffee1.7580.15711.210.000 No. of days/month working on family farm0.0580.0096.360.000 Number of merry-go-rounds0.3690.03012.480.000 HH member is member of local savings inst.-0.4220.097-4.350.000 HH member has a savings account in bank-0.1160.108-1.070.285 HH member has received a loan last 5 years-0.3620.080-4.510.000 Not recovered from recent shock-0.0750.084-0.890.371 Frequency not assisted in emergencies0.0360.0221.680.094 Risk neutral0.0920.0781.180.240

37. Exchange Labor V Respondent is recipient Respondent is provider Coef.Std. Err.zP>|z|Coef.Std. Err.zP>|z| Teacher-0.0010.140-0.010.994 Priest, preacher or missionary-0.5940.322-1.850.065 Extension officer, vet or ag.coop. rep.-0.6160.331-1.860.063 Civil servant or military officer-0.5650.145-3.910.000 Business owner, shopkeeper or petty trader0.2920.0992.950.003 Village chief or elder-0.4020.385-1.040.297 Politician or spokesperson-1.1490.324-3.540.000 Reciprocal characteristics Distance (kms)0.1280.0343.750.000-0.0800.024-3.340.001 Distance (kms) squared-0.0090.003-3.610.000 2.110.035 Family member1.1890.06119.370.0000.5320.0677.960.000 Same sex0.2670.0733.640.0000.6140.0867.120.000 Neighbor-3.0790.153-20.130.000-3.2320.141-22.990.000 "Friend"-2.3010.151-15.290.000-2.2940.143-16.070.000 Multiplex relationship3.1250.15120.690.0002.8960.13920.840.000

38. Summary I People who own land tend to avoid participation in bilateral cash transfers through networks, maybe as a strategy to protect wealthPeople who own land tend to avoid participation in bilateral cash transfers through networks, maybe as a strategy to protect wealth Merry-go-rounds and bilateral transfers through networks are financial substitutesMerry-go-rounds and bilateral transfers through networks are financial substitutes People receive cash transfers either as remittances from distant relatives, or from local contacts who have a higher education and hold salaried jobs or engage in remunerative off-farm businessesPeople receive cash transfers either as remittances from distant relatives, or from local contacts who have a higher education and hold salaried jobs or engage in remunerative off-farm businesses

39. Summary II There is a wealth effect on levels of transfers, both in cash and in kind, and both receiving and providingThere is a wealth effect on levels of transfers, both in cash and in kind, and both receiving and providing People receive on average more than they provide, suggesting a net flow of transfers towards farmers, possibly evidence of financial trickle-down from wealthier segments of the populationPeople receive on average more than they provide, suggesting a net flow of transfers towards farmers, possibly evidence of financial trickle-down from wealthier segments of the population

40. Summary III The less risk-averse are more likely to provide bilateral transfers, and to provide higher levels of transfersThe less risk-averse are more likely to provide bilateral transfers, and to provide higher levels of transfers Serious, negative shocks are associated with higher levels of transfersSerious, negative shocks are associated with higher levels of transfers The vulnerable tend to provide higher-value transfers in kind and more days of exchange labor, maybe as an investment in informal insuranceThe vulnerable tend to provide higher-value transfers in kind and more days of exchange labor, maybe as an investment in informal insurance

41. Thank You!