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Aspirations failure and formation in rural Nepal

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  • Janzen, Sarah A.
  • Magnan, Nicholas
  • Sharma, Sudhindra
  • Thompson, William M.

Abstract

Aspirations, or a lack thereof, have recently gained the attention of economists as a behavioral constraint to future-oriented behavior and investment. In this paper we empirically test the theories of aspirations failure and formation articulated in Appadurai (2004), Ray (2006), and Genicot and Ray (2015) using a unique dataset from rural Nepal. We ask two questions: (1) What is the relationship between aspirations and future-oriented behavior? and (2) To what extent are an individual's aspirations associated with the observable characteristics of those around her? We find that aspirations correspond with future-oriented economic behavior as predicted by theory: investment in the future increases with aspirations up to a certain point, but if the gap between one's current status and aspirations becomes too large, investment subsequently declines. We also find that one's aspirations are associated with outcomes of those in her social network of higher, but not lower, status. Together these findings provide empirical evidence that aspirations, which may be a social phenomenon, can either stimulate development or reinforce poverty.

Suggested Citation

  • Janzen, Sarah A. & Magnan, Nicholas & Sharma, Sudhindra & Thompson, William M., 2017. "Aspirations failure and formation in rural Nepal," Journal of Economic Behavior & Organization, Elsevier, vol. 139(C), pages 1-25.
  • Handle: RePEc:eee:jeborg:v:139:y:2017:i:c:p:1-25
    DOI: 10.1016/j.jebo.2017.04.003
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    3. Paula Carrasco & Rodrigo Ceni & Ivone Perazzo & Gonzalo Salas, 2021. "Are Not Any Silver Linings in the Cloud? Subjective Well-being Among Deprived Young People," Journal of Happiness Studies, Springer, vol. 22(2), pages 491-516, February.
    4. García, Sandra & Harker, Arturo & Cuartas, Jorge, 2019. "Building dreams: The short-term impacts of a conditional cash transfer program on aspirations for higher education," International Journal of Educational Development, Elsevier, vol. 64(C), pages 48-57.
    5. Gallenstein, Richard, 2020. "Biased Fairness Views and Internal constraints to risk-sharing: A lab-in-the-field analysis in Ghana," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304236, Agricultural and Applied Economics Association.
    6. Warn N. Lekfuangfu & Reto Odermatt, 2020. "All I have to do is dream? The role of aspirations in intergenerational mobility and well-being," PIER Discussion Papers 142, Puey Ungphakorn Institute for Economic Research, revised Jul 2020.
    7. Ross, Phillip H., 2019. "Occupation aspirations, education investment, and cognitive outcomes: Evidence from Indian adolescents," World Development, Elsevier, vol. 123(C), pages 1-1.
    8. Garcia, Adriana & Lensink, Robert & Voors, Maarten, 2020. "Does microcredit increase aspirational hope? Evidence from a group lending scheme in Sierra Leone," World Development, Elsevier, vol. 128(C).
    9. Dalton,Patricio S. & Ruschenpohler,Julius & Zia,Bilal Husnain, 2018. "Determinants and dynamics of business aspirations : evidence from small-scale entrepreneurs in an emerging market," Policy Research Working Paper Series 8400, The World Bank.
    10. Shelly Lundberg, 2020. "Educational gender gaps," Southern Economic Journal, John Wiley & Sons, vol. 87(2), pages 416-439, October.
    11. Paula Carrasco & Rodrigo Ceni & Ivonne Perazzo & Gonzalo Salas, 2019. "Are not any silver in the cloud? Subjective well-being among deprived young people," Documentos de Trabajo (working papers) 19-09, Instituto de Economia - IECON.
    12. Jing Liu & Fubin Huang & Zihan Wang & Chuanmin Shuai & Jiaxin Li, 2020. "Understanding the Role of Rural Poor’s Endogenous Impetus in Poverty Reduction: Evidence from China," Sustainability, MDPI, Open Access Journal, vol. 12(6), pages 1-16, March.
    13. Tabe-Ojong, Martin Paul Jr & Heckelei, Thomas & Baylis, Kathy, 2020. "Collective action and smallholder rural households: Implications for income and asset aspirations," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304580, Agricultural and Applied Economics Association.
    14. Tabe-Ojong, Martin Paul Jr & Heckelei, Thomas & Baylis, Kathy, 2020. "Aspiration formation and ecological shocks: An exploratory analysis in rural Kenya," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304583, Agricultural and Applied Economics Association.
    15. Raghunathan, Kalyani & Quisumbing, Agnes R. & Kumar, Neha & Cunningham, Kenda, 2018. "Women’s aspirations for the future, and their financial, social and educational investments," IFPRI discussion papers 1752, International Food Policy Research Institute (IFPRI).

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