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Abstract
This paper explores risk sharing in the Zone Lacustre, Mali, as viewed through
the lens of consumption smoothing. We find that idiosyncratic shocks appear to have
little impact on consumption, and that households respond to these shocks in a variety of
ways. In general, nonpoor households are more likely to enter into new income-generating
activities while poor households are more likely to engage in credit or gift
exchange or to ration consumption. When we construct a stronger test for consumption
smoothing, we find that changes in household income lead to modest changes in
consumption. Covariant shocks, as measured by village/round dummies, always lead to
changes in consumption. These results are robust to concerns regarding bias resulting
from measurement error or endogeneity of changes in income. Lastly, we find that
households with access to improved water control infrastructure are less vulnerable than
those that rely on rainfall or the flooding of the Niger River.