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Beyond fatalism - an empirical exploration of self-efficacy and aspirations failure in Ethiopia

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  • Stefan Dercon
  • Tanguy Bernard and Alemayehu Seyoum Taffesse

Abstract

Fatalism is considered pervasive, not least within many poor communities.� In this paper, we explore whether 'fatalistic' beliefs have implications for the attitudes and behaviour of poor rural households towards investment in the future.� We first explore the idea of fatalism drawing inspiration from theories in psychology focusing on the role of locus of control and self-efficacy, and from the theoretical framework of aspiration failure as developed in recent economic literature.� Using survey data from rural Ethiopia, we find evidence of fatalistic beliefs among a substantial group of rural households, as well as indicators consistent with a small aspiration gap and low self-efficacy.� We also find that such beliefs consistently correlate with lower demand for credit, in terms of loan size, repayment horizon and productive purposes.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number CSAE WPS/2011-03.

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Date of creation: 01 Jan 2011
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Handle: RePEc:oxf:wpaper:csae-wps/2011-03

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  2. Banerjee, Abhijit Vinayak & Benabou, Roland & Mookherjee, Dilip (ed.), 2006. "Understanding Poverty," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780195305203, October.
  3. Yamauchi, Futoshi, 2007. "Social learning, neighborhood effects, and investment in human capital: Evidence from Green-Revolution India," Journal of Development Economics, Elsevier, Elsevier, vol. 83(1), pages 37-62, May.
  4. Nava Ashraf & Dean S. Karlan & Wesley Yin, 2005. "Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines," Working Papers, Economic Growth Center, Yale University 917, Economic Growth Center, Yale University.
  5. Dean Karlan & Jonathan Zinman, 2005. "Elasticities of demand for consumer credit," Natural Field Experiments, The Field Experiments Website 00280, The Field Experiments Website.
  6. Hanming Fang & Glenn C. Loury, 2004. "Toward An Economic Theory of Dysfunctional Identity," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1483, Cowles Foundation for Research in Economics, Yale University.
  7. Macours, Karen & Vakis, Renos, 2009. "Changing households'investments and aspirations through social interactions : evidence from a randomized transfer program," Policy Research Working Paper Series 5137, The World Bank.
  8. Hoff, Karla & Pandey, Priyanka, 2004. "Belief systems and durable inequalities : an experimental investigation of Indian caste," Policy Research Working Paper Series 3351, The World Bank.
  9. Sourafel Girma & Abbi Kedir, 2005. "Heterogeneity in returns to schooling: Econometric evidence from Ethiopia," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 41(8), pages 1405-1416.
  10. Edward Miguel & Michael Kremer, 2003. "Networks, social learning, and technology adoption: The case of deworming drugs in kenya," Natural Field Experiments, The Field Experiments Website 00312, The Field Experiments Website.
  11. Krishnan, P. & Krutikova, S., 2010. "Non-cognitive skill formation in poor neighbourhoods of urban India (updated 27-02-2012)," Cambridge Working Papers in Economics, Faculty of Economics, University of Cambridge 1010, Faculty of Economics, University of Cambridge.
  12. Graham, Carol & Eggers, Andrew & Sukhtankar, Sandip, 2004. "Does happiness pay?: An exploration based on panel data from Russia," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 55(3), pages 319-342, November.
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Cited by:
  1. Prasad, Sanjay K. & Pullabhotla, Hemant & Ganesh-Kumar, A., 2011. "Supply and demand for cereals in Nepal, 2010–2030:," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 1120, International Food Policy Research Institute (IFPRI).
  2. Bernard, Tanguy & Taffesse, Alemayehu Seyoum, 2012. "Measuring aspirations: Discussion and example from Ethiopia:," ESSP working papers, International Food Policy Research Institute (IFPRI) 47, International Food Policy Research Institute (IFPRI).
  3. Kosec, Katrina & Hameed, Madeeha & Hausladen, Stephanie, 2012. "Aspirations in rural Pakistan: An empirical analysis," PSSP working papers, International Food Policy Research Institute (IFPRI) 9, International Food Policy Research Institute (IFPRI).
  4. Laborde, David & Martin, Will & van der Mensbrugghe, Dominique, 2011. "Measuring the impacts of global trade reform with optimal aggregators of distortions," Policy Research Working Paper Series 5665, The World Bank.
  5. Ghoshal, Sayantan & Jana, Smarajit & Mani, Anandi & Mitra, Sandip & Roy, Sanchari, 2013. "Believing in Oneself: Can Psychological Training Overcome the Effects of Social Exclusion?," CAGE Online Working Paper Series, Competitive Advantage in the Global Economy (CAGE) 152, Competitive Advantage in the Global Economy (CAGE).
  6. de Brauw, Alan & Gilligan, Daniel, 2011. "Using the regression discontinuity design with implicit partitions: The impacts of comunidades solidarias rurales on schooling in El Salvador," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 1116, International Food Policy Research Institute (IFPRI).
  7. Yamauchi, Futoshi & Liu, Yanyan, 2011. "Impacts of an early education intervention on students' learning achievement: Evidence from the Philippines," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 1121, International Food Policy Research Institute (IFPRI).
  8. Risso Brandon, Fiorella & Pasquier-Doumer, Laure, 2013. "Aspiration failure: a poverty trap for indigenous children in Peru?," Economics Papers from University Paris Dauphine 123456789/12016, Paris Dauphine University.
  9. Marcus Böhme, 2012. "Migration and Education Aspirations - Another Channel of Brain Gain?," Kiel Working Papers 1811, Kiel Institute for the World Economy.
  10. Zambrano, Patricia & Maldonado, Jorge H. & Mendoza, Sandra L. & Ruiz, Lorena & Fonseca, Luz Amparo & Cardona, Iván, 2011. "Women cotton farmers: Their perceptions and experiences with transgenic varieties: A case study for Colombia," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 1118, International Food Policy Research Institute (IFPRI).
  11. Dercon, Stefan & Singh, Abhijeet, 2013. "From Nutrition to Aspirations and Self-Efficacy: Gender Bias over Time among Children in Four Countries," World Development, Elsevier, Elsevier, vol. 45(C), pages 31-50.
  12. Cai, Ximing & Yang, Yi-Chen E. & Zhao, Jianshi & Ringler, Claudia, 2011. "Can water allocation in the Yellow River basin be improved?: Insights from a multi-agent system model," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 1117, International Food Policy Research Institute (IFPRI).
  13. Babu, Suresh Chandra & Glendenning, Claire J. & Asenso-Okyere, Kwadwo & Govindarajan, Senthil Kumar, 2012. "Farmers’ information needs and search behaviors: Case study in Tamil Nadu, India," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 1165, International Food Policy Research Institute (IFPRI).
  14. Tanguy Bernard & Stefan Dercon & Kate Orkin & Alemayehu Seyoum Taffesse, 2014. "The Future in Mind: Aspirations and Forward-Looking Behaviour in Rural Ethiopia," CSAE Working Paper Series 2014-16, Centre for the Study of African Economies, University of Oxford.
  15. Laura Camfield & Awae Masae & J. McGregor & Buapun Promphaking, 2013. "Cultures of Aspiration and Poverty? Aspirational Inequalities in Northeast and Southern Thailand," Social Indicators Research, Springer, Springer, vol. 114(3), pages 1049-1072, December.

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