Risk and Insurance

These are a couple interesting facts I learned from the lecture:

• As mentioned in the lecture, Prof. Banerjee, together with a reporter from the New York Times, found no perceived effect of the global financial crisis on India’s poor laborers.
• Prof. Banerjee argues the reason that India’s poor laborers were not aware of the financial crisis is because they commonly lose their jobs and are used to having to find another job.
• In Townsend’s study of the Thai Economics Crisis of 1998, 2% of the variation in the income of households in the poorer parts of northern Thailand was attributable to the crisis.
• During the 1998 Indonesian economic crisis, the real income of rice farmers increased.
• Urban employees tend to be the people most directly hurt by big global financial shocks.
• The Princeton experiments described in the lecture demonstrated that cortisol can have an impact on decision-making ability. 
• When there is a drought and people cannot farm, everyone starts selling their labor, causing wages to decrease.
• The most common way in which the poor may avoid risk is by ensuring that every member of the family has several different jobs, sometimes even temporary jobs that are out of town.