IDEAS home Printed from https://ideas.repec.org/p/ucf/inwopa/inwopa717.html
   My bibliography  Save this paper

Subjective Well-being, Risk Perceptions and Time Discounting: Evidence from a large-scale cash transfer programme

Author

Listed:
  • Bruno Martorano
  • Sudhanshu Handa
  • Carolyn Halpern
  • Harsha Thirumurthy

Abstract

The risk and time preferences of individuals as well as their subjective expectations regarding the future are likely to play an important role in choice behaviour. Measurement of these individual characteristics in large-scale surveys has been a recent development and empirical evidence on their associations with behaviour remains limited. We summarize the results of measuring individuals’ attitudes towards inter-temporal choice, risk, and the future in a large-scale field survey in Kenya. We find very low rates of inconsistency in interpreting questions on time and risk preferences. Cash transfers alone do not appear to impact time discounting or risk aversion, but they do have an important impact on subjective well-being measures and on future perceptions of quality of life.

Suggested Citation

  • Bruno Martorano & Sudhanshu Handa & Carolyn Halpern & Harsha Thirumurthy, 2014. "Subjective Well-being, Risk Perceptions and Time Discounting: Evidence from a large-scale cash transfer programme," Papers inwopa717, Innocenti Working Papers.
    • Handle: RePEc:ucf:inwopa:inwopa717
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    as
    1. Lisa Cameron & Manisha Shah, 2015. "Risk-Taking Behavior in the Wake of Natural Disasters," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 484-515.
    2. Loewenstein, George, 1996. "Out of Control: Visceral Influences on Behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(3), pages 272-292, March.
    3. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    4. Angus Deaton, 2008. "Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 53-72, Spring.
    5. Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 1-102.
    6. Havranek, Tomas & Horvath, Roman & Irsova, Zuzana & Rusnak, Marek, 2015. "Cross-country heterogeneity in intertemporal substitution," Journal of International Economics, Elsevier, vol. 96(1), pages 100-118.
    7. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1039-1061.
    8. Michael Daly & Liam Delaney & Colm P. Harmon, 2009. "Psychological and Biological Foundations of Time Preference," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 659-669, 04-05.
    9. Glenn W. Harrison & Morten I. Lau & Melonie B. Williams, 2002. "Estimating Individual Discount Rates in Denmark: A Field Experiment," American Economic Review, American Economic Association, vol. 92(5), pages 1606-1617, December.
    10. Yesuf, Mahmud & Bluffstone, Randall, 2008. "Wealth and Time Preference in Rural Ethiopia," RFF Working Paper Series dp-08-16-efd, Resources for the Future.
    11. Sudhanshu Handa & John A. Maluccio, 2010. "Matching the Gold Standard: Comparing Experimental and Nonexperimental Evaluation Techniques for a Geographically Targeted Program," Economic Development and Cultural Change, University of Chicago Press, vol. 58(3), pages 415-447, April.
    12. John Ifcher & Homa Zarghamee, 2011. "Happiness and Time Preference: The Effect of Positive Affect in a Random-Assignment Experiment," American Economic Review, American Economic Association, vol. 101(7), pages 3109-3129, December.
    13. Juan Camilo Cardenas & Jeffrey Carpenter, 2008. "Behavioural Development Economics: Lessons from Field Labs in the Developing World," Journal of Development Studies, Taylor & Francis Journals, vol. 44(3), pages 311-338.
    14. Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2010. "Risk and Time Preferences: Linking Experimental and Household Survey Data from Vietnam," American Economic Review, American Economic Association, vol. 100(1), pages 557-571, March.
    15. Ed Diener & Eunkook Suh & Heidi Smith & Liang Shao, 1995. "National differences in reported subjective well-being: Why do they occur?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 34(1), pages 7-32, January.
    16. Saul Pleeter & John T. Warner, 2001. "The Personal Discount Rate: Evidence from Military Downsizing Programs," American Economic Review, American Economic Association, vol. 91(1), pages 33-53, March.
    17. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    18. Quang Nguyen & Colin Camerer & Tomomi Tanaka, 2010. "Risk and Time Preferences Linking Experimental and Household Data from Vietnam," Post-Print halshs-00547090, HAL.
    19. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    20. Berg, Erlend, 2013. "Are poor people credit-constrained or myopic? Evidence from a South African panel," Journal of Development Economics, Elsevier, vol. 101(C), pages 195-205.
    21. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39, pages 137-137.
    22. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    23. Delavande, Adeline & Giné, Xavier & McKenzie, David, 2011. "Measuring subjective expectations in developing countries: A critical review and new evidence," Journal of Development Economics, Elsevier, vol. 94(2), pages 151-163, March.
    24. Paul Schultz, T., 2004. "School subsidies for the poor: evaluating the Mexican Progresa poverty program," Journal of Development Economics, Elsevier, vol. 74(1), pages 199-250, June.
    25. Vieider, Ferdinand M. & Chmura, Thorsten & Martinsson, Peter, 2012. "Risk attitudes, development, and growth: Macroeconomic evidence from experiments in 30 countries," Discussion Papers, WZB Junior Research Group Risk and Development SP II 2012-401, WZB Berlin Social Science Center.
    26. Paul A. Samuelson, 1937. "A Note on Measurement of Utility," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 4(2), pages 155-161.
    27. Juan Jose Diaz & Sudhanshu Handa, 2006. "An Assessment of Propensity Score Matching as a Nonexperimental Impact Estimator: Evidence from Mexico’s PROGRESA Program," Journal of Human Resources, University of Wisconsin Press, vol. 41(2).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Huawei Han & Qin Gao, 2020. "Does Welfare Participation Improve Life Satisfaction? Evidence from Panel Data in Rural China," Journal of Happiness Studies, Springer, vol. 21(5), pages 1795-1822, June.
    2. Ramlatu Attah & Valentina Barca & Andrew Kardan & Ian MacAuslan & Fred Merttens & Luca Pellerano, 2016. "Can Social Protection Affect Psychosocial Wellbeing and Why Does This Matter? Lessons from Cash Transfers in Sub-Saharan Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 52(8), pages 1115-1131, August.
    3. Contreras Suarez, Diana & Cameron, Lisa A., 2016. "Conditional Cash Transfers: Do They Change Time Preferences and Educational Aspirations?," IZA Discussion Papers 10309, Institute of Labor Economics (IZA).
    4. McGuire, Joel & Kaiser, Caspar & Bach-Mortensen, Anders, 2020. "The impact of cash transfers on subjective well-being and mental health in low- and middle- income countries: A systematic review and meta-analysis," SocArXiv ydr54, Center for Open Science.
    5. Qiu Cheng & Kinglun Ngok, 2023. "Does the Dibao Program Improve Citizens’ Life Satisfaction in China? Perceptions of Pathways of Poverty Attribution and Income Inequality," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 18(2), pages 975-995, April.
    6. Zhou, Yunbo & Huang, Xingzi & Shen, Yangyang & Tian, Liu, 2023. "Does targeted poverty alleviation policy lead to happy life? Evidence from rural China," China Economic Review, Elsevier, vol. 81(C).
    7. Kelly Kilburn & Sudhanshu Handa & Gustavo Angeles & Peter Mvula & Maxton Tsoka & UNICEF Office of Research - Innocenti, 2016. "Happiness and Alleviation of Income Poverty: Impacts of an unconditional cash transfer programme using a subjective well-being approach," Papers inwopa857, Innocenti Working Papers.
    8. Daniel Morales Martínez & Alexandre Gori Maia, 2018. "The Impacts of Cash Transfers on Subjective Wellbeing and Poverty: The Case of Colombia," Journal of Family and Economic Issues, Springer, vol. 39(4), pages 616-633, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shi Yingnan & Xinghao Li, 2017. "The Time Preference of Chinese Tend to be Less Affected by Positive Emotions: As Proved by an Experimental Study," Journal of Economics and Behavioral Studies, AMH International, vol. 9(4), pages 201-216.
    2. Jindrich Matousek & Tomas Havranek & Zuzana Irsova, 2022. "Individual discount rates: a meta-analysis of experimental evidence," Experimental Economics, Springer;Economic Science Association, vol. 25(1), pages 318-358, February.
    3. Kureishi, Wataru & Paule-Paludkiewicz, Hannah & Tsujiyama, Hitoshi & Wakabayashi, Midori, 2021. "Time preferences over the life cycle and household saving puzzles," Journal of Monetary Economics, Elsevier, vol. 124(C), pages 123-139.
    4. Kumar, Pradeep & Kant, Shashi, 2019. "Endogenous time preferences of forest goods and community-based forest management," Ecological Economics, Elsevier, vol. 163(C), pages 205-214.
    5. Kureishi, Wataru & Paule-Paludkiewicz, Hannah & Tsujiyama, Hitoshi & Wakabayashi, Midori, 2020. "Time preferences over the life cycle," SAFE Working Paper Series 267, Leibniz Institute for Financial Research SAFE, revised 2020.
    6. repec:cup:judgdm:v:17:y:2022:i:5:p:988-1014 is not listed on IDEAS
    7. Ute Rink & Theresa Rollwage, 2022. "Household disability and time preferences: Evidence from incentivized experiments in Vietnam," TVSEP Working Papers wp-027, Leibniz Universitaet Hannover, Institute of Development and Agricultural Economics, Project TVSEP.
    8. Preuss, Malte, 2021. "Intra-individual stability of two survey measures on forward-looking attitude," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 201-227.
    9. repec:jdm:journl:v:17:y:2022:i:5:p:988-1014 is not listed on IDEAS
    10. Olivier Toubia & Eric Johnson & Theodoros Evgeniou & Philippe Delquié, 2013. "Dynamic Experiments for Estimating Preferences: An Adaptive Method of Eliciting Time and Risk Parameters," Management Science, INFORMS, vol. 59(3), pages 613-640, June.
    11. Aurélien Baillon & Owen O'Donnell & Stella Quimbo & Kim van Wilgenburg, 2022. "Do time preferences explain low health insurance take‐up?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 89(4), pages 951-983, December.
    12. Schleich, Joachim & Gassmann, Xavier & Meissner, Thomas & Faure, Corinne, 2019. "A large-scale test of the effects of time discounting, risk aversion, loss aversion, and present bias on household adoption of energy-efficient technologies," Energy Economics, Elsevier, vol. 80(C), pages 377-393.
    13. Scholten, Marc & Read, Daniel, 2006. "Beyond discounting: the tradeoff model of intertemporal choice," LSE Research Online Documents on Economics 22710, London School of Economics and Political Science, LSE Library.
    14. Han, Ruokang & Takahashi, Taiki, 2012. "Psychophysics of time perception and valuation in temporal discounting of gain and loss," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(24), pages 6568-6576.
    15. Alex Imas & Michael A. Kuhn & Vera Mironova, 2015. "A History of Violence: Field Evidence on Trauma, Discounting and Present Bias," CESifo Working Paper Series 5338, CESifo.
    16. Lucy F. Ackert & Richard Deaves & Jennifer Miele & Quang Nguyen, 2020. "Are Time Preference and Risk Preference Associated with Cognitive Intelligence and Emotional Intelligence?," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 21(2), pages 136-156, April.
    17. Manzini, Paola & Mariotti, Marco, 2007. "Choice Over Time," IZA Discussion Papers 2993, Institute of Labor Economics (IZA).
    18. Antoine Bozio & Guy Laroque & Cormac O’Dea, 2017. "Discount rate heterogeneity among older households: a puzzle?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(2), pages 647-680, April.
    19. Eduard Marinov, 2017. "The 2017 Nobel Prize in Economics," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 117-159.
    20. Committee, Nobel Prize, 2017. "Richard H. Thaler: Integrating Economics with Psychology," Nobel Prize in Economics documents 2017-1, Nobel Prize Committee.
    21. Bernedo Del Carpio, María & Alpizar, Francisco & Ferraro, Paul J., 2022. "Time and risk preferences of individuals, married couples and unrelated pairs," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 97(C).
    22. Liebenehm, S. & Waibel, H., 2014. "Risk and Time Preferences of West African Cattle Farmers," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 49, March.

    More about this item

    Keywords

    risk; surveys; transfer income;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucf:inwopa:inwopa717. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Patrizia Faustini (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.