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Bayesian Herders: Asymmetric Updating Of Rainfall Beliefs In Response To External Forecasts


  • Lybbert, Travis J.
  • Barrett, Christopher B.
  • McPeak, John G.
  • Luseno, Winnie K.


Temporal climate risk weighs heavily on many of the world's poor. Recent advances in model-based climate forecasting have expanded the range, timeliness and accuracy of forecasts available to decision-makers whose welfare depends on stochastic climate outcomes. There has consequently been considerable recent investment in improved climate forecasting for the developing world. Yet, in cultures that have long used indigenous climate forecasting methods, forecasts generated and disseminated by outsiders using unfamiliar methods may not readily gain the acceptance necessary to induce behavioral change. The value of model-based climate forecasts depends critically on the premise that forecast recipients actually use external forecast information to update their rainfall expectations. We test this premise using unique survey data from pastoralists and agropastoralists in southern Ethiopia and northern Kenya, specifying and estimating a model of herders updating seasonal rainfall beliefs. We find that those who receive and believe model-based seasonal climate forecasts indeed update their priors in the direction of the forecast received, assimilating optimistic forecasts more readily than pessimistic forecasts.

Suggested Citation

  • Lybbert, Travis J. & Barrett, Christopher B. & McPeak, John G. & Luseno, Winnie K., 2003. "Bayesian Herders: Asymmetric Updating Of Rainfall Beliefs In Response To External Forecasts," Working Papers 14762, Cornell University, Department of Applied Economics and Management.
  • Handle: RePEc:ags:cudawp:14762

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    References listed on IDEAS

    1. David Hirshleifer & Tyler Shumway, 2003. "Good Day Sunshine: Stock Returns and the Weather," Journal of Finance, American Finance Association, vol. 58(3), pages 1009-1032, June.
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    3. Barrett, Christopher B., 2002. "Food security and food assistance programs," Handbook of Agricultural Economics,in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 40, pages 2103-2190 Elsevier.
    4. Roll, Richard, 1984. "Orange Juice and Weather," American Economic Review, American Economic Association, vol. 74(5), pages 861-880, December.
    5. Matthew Rabin & Joel L. Schrag, 1999. "First Impressions Matter: A Model of Confirmatory Bias," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 37-82.
    6. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
    7. C. Barrett & K. Smith & P. Box, 2001. "Not Necessarily In The Same Boat: Heterogeneous Risk Assessment Among East African Pastoralists," Journal of Development Studies, Taylor & Francis Journals, vol. 37(5), pages 1-30.
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    Cited by:

    1. Just, David R. & Roberts, Michael J., 2004. "The Illusion Of Control, Cognitive Dissonance And Farmer Perception Of Gm Crops," 2004 Annual meeting, August 1-4, Denver, CO 19941, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. 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.
    3. Santos, Paulo & Barrett, Christopher B., 2011. "Persistent poverty and informal credit," Journal of Development Economics, Elsevier, vol. 96(2), pages 337-347, November.
    4. Doss, Cheryl R. & McPeak, John G. & Barrett, Christopher B., 2005. "Perceptions of Risk within Pastoralist Households in Northern Kenya and Southern Ethiopia," 2005 Annual meeting, July 24-27, Providence, RI 19504, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Adeline Delavande & Hans-Peter Kohler, 2009. "Subjective expectations in the context of HIV/AIDS in Malawi," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 20(31), pages 817-875, June.

    More about this item


    Agribusiness; O1; D1; Q12;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • D1 - Microeconomics - - Household Behavior
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets


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