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On the sources of risk preferences in rural Vietnam

Author

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  • Dang, Duc Anh

Abstract

In 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.

Suggested Citation

  • Dang, Duc Anh, 2012. "On the sources of risk preferences in rural Vietnam," MPRA Paper 38738, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:38738
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    File URL: https://mpra.ub.uni-muenchen.de/38738/1/MPRA_paper_38738.pdf
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    References listed on IDEAS

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    Cited by:

    1. Muhammad Ryan SANJAYA, 2013. "Shocks, Physical Characteristics, and Risk Taking Behaviour," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 3(9), pages 1081-1105, September.
    2. Sanjaya, Muhammad Ryan, 2013. "On the source of risk aversion in Indonesia using micro data 2007," Economics Discussion Papers 2013-33, Kiel Institute for the World Economy (IfW).

    More about this item

    Keywords

    Climate variation; risk aversion; Vietnam;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • O53 - Economic Development, Innovation, 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 and their Management; Global Warming

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