Christopher R. Udry is an American economist who currently serves as King Professor of Economics at Northwestern University.
Udry is the co-founder (with Dean Karlan) and current co-director of the Global Poverty Research Lab at the Kellogg School of Management.
Finally, his research contributions have been acknowledged by a fellowship in the Econometric Society in 2005 as well as membership in the American Academy of Arts and Sciences (since 2011).
By extension, the standard instruments used to address moral hazard and adverse selection in financial systems - collateral and interlinked contracts - are largely absent.
In northern Nigeria, Udry finds that households react to harvest shortfalls on their upland farm plots by selling their grain stocks (rather than their livestock) and prepare for such adverse shocks expected to occur in the near future by increasing their current saving.
Using detailed agronomic data on the inputs and returns of farm plots in rural Burkina Faso, Udry et al. document substantial inefficiencies in the allocation of agricultural production factors across plots controlled by different household members, which bear substantial implications for the design of agricultural policy in developing countries.
[16] Investigating why small-scale farmers in developing countries fail to invest in activities with high expected returns such as the purchase and application of chemical fertilizer, Udry, Karlan, Osei and Osei-Akoto design an experiment in northern Ghana wherein farmers are randomly assigned to receive cash grants, opportunities to purchase or receive for free rainfall-indexed insurance, or a combination of the two.
Finally, Karlan et al. also show that even though there is sufficient demand to sustain a market for rainfall insurance in rural Ghana, a lack of trust, recency bias and the absence of payouts due to favourable rainfalls may erode participation in insurance markets despite its high benefits.