On the sources of risk preferences in rural Vietnam
AbstractIn 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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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 38738.
Date of creation: Apr 2012
Date of revision:
Climate variation; risk aversion; Vietnam;
Find related papers by JEL classification:
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
This paper has been announced in the following NEP Reports:
- NEP-AGR-2012-05-22 (Agricultural Economics)
- NEP-ALL-2012-05-22 (All new papers)
- NEP-DEV-2012-05-22 (Development)
- NEP-ENV-2012-05-22 (Environmental Economics)
- NEP-EVO-2012-05-22 (Evolutionary Economics)
- NEP-UPT-2012-05-22 (Utility Models & Prospect Theory)
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