Food Gifting and Household Food Security

ABSTRACT Food gifting provides an important means of risk sharing in agrarian economies where farming households have limited access to formal credit and insurance markets. Food gifting is also an important source of food for households that are struggling with food scarcity. However, gifting may lead to free‐riding behavior and reduce the incentive for adopting risk‐reducing production practices. We construct a simple conceptual model of gifting to show that being in a food gifting regime reduces the adoption of risk‐reducing practices. Using primary data from rural Tanzania, we then test the prediction of our conceptual model. We estimate an endogenous switching model and find that engaging in food gifting is correlated with a reduction in the adoption of risk‐reducing practices. We find no evidence, however, that food gifting has a statistically significant relationship with household food security. Our findings suggest that informal nonmarket risk‐sharing institutions in the global South may not be sufficient on their own to address food security.