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The Role of Risk and Ambiguity Preferences on Early-Childhood Investment: Evidence from Rural India

Author

Listed:
  • Michael Cuna
  • Lenka Fiala
  • Min Sok Lee
  • John List
  • Sutanuka Roy

Abstract

This study examines how mothers' risk and ambiguity preferences affect early childhood investments and outcomes by assessing over 6,000 mothers in Rajasthan, India. Results show that more risk and ambiguity averse mothers make greater investments in their children's nutrition between ages 0-6. These investments correlate with superior cognitive and non-cognitive skills in children, even after controlling for socioeconomic factors. Notably, higher maternal risk and ambiguity aversion can mitigate negative impacts of socioeconomic disadvantages (maternal illiteracy, belonging to historically discriminated groups, limited media access) on all measures of early-life skills, highlighting the importance of understanding preferences in addressing inequities.

Suggested Citation

  • Michael Cuna & Lenka Fiala & Min Sok Lee & John List & Sutanuka Roy, 2025. "The Role of Risk and Ambiguity Preferences on Early-Childhood Investment: Evidence from Rural India," Artefactual Field Experiments 00810, The Field Experiments Website.
    • Handle: RePEc:feb:artefa:00810
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    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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