Risk preferences under extreme poverty : a field experiment
Until now, the dominant belief concerning the relationship between poverty and risk aversion is that the poor are more risk averse. If the poor are more risk averse, then they will choose "low risk-low return" activities that trap them in poverty. However, both empirical and experimental e...
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| Lenguaje: | Inglés (English) |
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Universidad de los Andes, Facultad de Economía, CEDE
2018
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| Acceso en línea: | http://hdl.handle.net/1992/8209 |
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ir-1992-8209 |
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ir-1992-82092020-09-16T20:23:30Z Risk preferences under extreme poverty : a field experiment Preferencias sobre el riesgo bajo extrema pobreza : un experimento en campo Caballero Orozco, Gustavo Adolfo Risk aversion Poverty Regression discontinuity design Undernourishment Pobreza - Investigaciones - Colombia Riesgo (Economía) - Toma de decisiones - Investigaciones - Colombia C93, D81, D91, I30 Until now, the dominant belief concerning the relationship between poverty and risk aversion is that the poor are more risk averse. If the poor are more risk averse, then they will choose "low risk-low return" activities that trap them in poverty. However, both empirical and experimental evidence show no clear pattern such as would suggest that the poor are somehowmore averse to risk than others; at times, they even seem to embrace risk, while at other times, there seems to be no difference. Focus has tended to be on extreme behaviors, as these are related to sub-optimal decisions such as have even raised questions whether an individual can be simultaneously both poor and rational. Amongst all the available empirical evidence, there is one bit of evidence of special interest-changes in behavior whenever subsistence is at risk. This paper emerges from the fact that recent experimental evidence in both psychology and economics suggests that certain decisions made under risk respond to reference points.We develop a theory within the traditional streamof rational choices, whereby the references are set by only observable variables, such as prices and family size... Hasta hoy, la creencia dominante acerca de la relación entre la pobreza y la aversión al riesgo es que los pobres son más adversos al riesgo que el resto. Si esto es cierto entonces los pobres se van a quedar escogiendo actividades de "bajo riesgo - bajo retorno" lo que los atrapa en la pobreza. Sin embargo, la evidencia experimental y empírica no muestra un patrón claro ya que los pobres a veces son más adversos al riesgo, a veces menos, y otras veces no parece haber relación alguna. Sin embargo, entre toda la evidencia disponible hay una de interés especial y es que el comportamiento parece cambiar cuando la subsistencia se encuentra en juego. Este documento emerge de la evidencia que, desde la economía y la sicología, sugiere que algunos comportamientos bajo riesgo responden a referencias. Se desarrolla una teoría, dentro de la línea de decisiones racionales en el que las referencias son determinadas por variables observables. En esta teoría, quienes viven bajo la pobreza extrema van a responder a la referencia del ingreso que les asegura el consumo de un mínimo de calorías para llevar una vida sana y larga... 2018-09-27T16:51:16Z 2018-09-27T16:51:16Z 2010 document publishedVersion 1657-5334 http://hdl.handle.net/1992/8209 1657-7191 eng Documentos CEDE No. 33 Noviembre de 2010 Al consultar y hacer uso de este recurso, está aceptando las condiciones de uso establecidas por los autores. openAccess Universidad de los Andes, Facultad de Economía, CEDE instname:Universidad de los Andes reponame:Repositorio Institucional Séneca |
| institution |
Universidad de los Andes |
| collection |
DSpace |
| language |
Inglés (English) |
| topic |
Risk aversion Poverty Regression discontinuity design Undernourishment Pobreza - Investigaciones - Colombia Riesgo (Economía) - Toma de decisiones - Investigaciones - Colombia C93, D81, D91, I30 |
| spellingShingle |
Risk aversion Poverty Regression discontinuity design Undernourishment Pobreza - Investigaciones - Colombia Riesgo (Economía) - Toma de decisiones - Investigaciones - Colombia C93, D81, D91, I30 Caballero Orozco, Gustavo Adolfo Risk preferences under extreme poverty : a field experiment |
| description |
Until now, the dominant belief concerning the relationship between poverty and risk aversion is that the poor are more risk averse. If the poor are more risk averse, then they will choose "low risk-low return" activities that trap them in poverty. However, both empirical and experimental evidence show no clear pattern such as would suggest that the poor are somehowmore averse to risk than others; at times, they even seem to embrace risk, while at other times, there seems to be no difference. Focus has tended to be on extreme behaviors, as these are related to sub-optimal decisions such as have even raised questions whether an individual can be simultaneously both poor and rational. Amongst all the available empirical evidence, there is one bit of evidence of special interest-changes in behavior whenever subsistence is at risk. This paper emerges from the fact that recent experimental evidence in both psychology and economics suggests that certain decisions made under risk respond to reference points.We develop a theory within the traditional streamof rational choices, whereby the references are set by only observable variables, such as prices and family size... |
| format |
Desconocido (Unknown) |
| author |
Caballero Orozco, Gustavo Adolfo |
| author_facet |
Caballero Orozco, Gustavo Adolfo |
| author_sort |
Caballero Orozco, Gustavo Adolfo |
| title |
Risk preferences under extreme poverty : a field experiment |
| title_short |
Risk preferences under extreme poverty : a field experiment |
| title_full |
Risk preferences under extreme poverty : a field experiment |
| title_fullStr |
Risk preferences under extreme poverty : a field experiment |
| title_full_unstemmed |
Risk preferences under extreme poverty : a field experiment |
| title_sort |
risk preferences under extreme poverty : a field experiment |
| publisher |
Universidad de los Andes, Facultad de Economía, CEDE |
| publishDate |
2018 |
| url |
http://hdl.handle.net/1992/8209 |
| _version_ |
1705932330372169728 |
| score |
12,131701 |