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| Galarza, Francisco B.. |
| This paper estimates the risk preferences of cotton farmers in Southern Peru, using the results from a multiple-price-list lottery game. Assuming that preferences conform to two of the leading models of decision under risk. Expected Utility Theory (EUT) and Cumulative Prospect Theory (CPT) -- we find strong evidence of moderate risk aversion. Once we include individual characteristics in the estimation of risk parameters, we observe that farmers use subjective nonlinear probability weighting, a behavior consistent with CPT. Interestingly, when we allow for preference heterogeneity via the estimation of mixture models -- where the proportion of subjects who behave according to EUT or to CPT is endogenously determined -- we find that the majority of farmers’... |
| Tipo: Working or Discussion Paper |
Palavras-chave: International Development; Research Methods/ Statistical Methods; Risk and Uncertainty. |
| Ano: 2009 |
URL: http://purl.umn.edu/92247 |
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| Lybbert, Travis J.; Galarza, Francisco B.; McPeak, John G.; Barrett, Christopher B.; Boucher, Stephen R.; Carter, Michael R.; Chantarat, Sommarat; Fadlaoui, Aziz; Mude, Andrew G.. |
| The effective design and implementation of interventions that reduce vulnerability and poverty require a solid understanding of underlying poverty dynamics and associated behavioral responses. Stochastic and dynamic benefit streams can make it difficult for the poor to learn the value of such interventions to them. We explore how dynamic field experiments can help (i) intended beneficiaries to learn and understand these complicated benefit streams, and (ii) researchers to better understand how the poor respond to risk when faced with nonlinear welfare dynamics. We discuss and analyze dynamic risk valuation experiments in Morocco, Peru, and Kenya. |
| Tipo: Journal Article |
Palavras-chave: Poverty; Risk and uncertainty; Dynamics; Experiments; Kenya; Morocco; Peru; International Development; Research Methods/ Statistical Methods; Risk and Uncertainty. |
| Ano: 2010 |
URL: http://purl.umn.edu/90791 |
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