Sunday, August 08, 2010

Tanaka, Camerer and Nguyen AER - Eliciting Risk and Time Preferences

Risk and Time Preferences: Linking Experimental and Household Survey Data from Vietnam

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Author Info
Tomomi Tanaka
Colin F. Camerer
Quang Nguyen

We conducted experiments in Vietnamese villages to determine the predictors of risk and time preferences. In villages with higher mean income, people are less loss-averse and more patient. Household income is correlated with patience but not with risk. We expand measurements of risk and time preferences beyond expected utility and exponential discounting, replacing those models with prospect theory and a three-parameter hyperbolic discounting model. Comparable risk parameter estimates have been found for Chinese farmers, using our method. (C83, D12, O12, P38)

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