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On the sources of risk preferences in rural Vietnam

  • Dang, Duc Anh
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    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.

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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38738.

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    Date of creation: Apr 2012
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    Handle: RePEc:pra:mprapa:38738
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