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On the sources of risk preferences in rural Vietnam

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  • Dang, Duc Anh
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    Abstract

    In this paper, I provide a new empirical evidence that natural environment can shape individual risk preferences. By combining historical data on climate variation and contemporary survey questions on risk aversion, I find that risk aversion is significantly different for people who live in areas that have suffered high frequency of natural disasters. In particular, individuals highly affected by climate volatility show a long term risk aversion. The finding also supports the hypothesis that when people used to live in risky environment, an incremental increase in risk affects their risk preferences less.

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    File URL: http://mpra.ub.uni-muenchen.de/38738/
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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38738.

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    Date of creation: Apr 2012
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    Handle: RePEc:pra:mprapa:38738

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    Keywords: Climate variation; risk aversion; Vietnam;

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    Cited by:
    1. Sanjaya, Muhammad Ryan, 2013. "On the source of risk aversion in Indonesia using micro data 2007," Economics Discussion Papers 2013-33, Kiel Institute for the World Economy.

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