Revising Commitments: Field Evidence on the Adjustment of Prior Choices

57 Pages Posted: 12 May 2012 Last revised: 13 May 2023

See all articles by Xavier Giné

Xavier Giné

World Bank - Development Research Group (DECRG)

Jessica Goldberg

University of Maryland, Department of Economics

Dan Silverman

University of Michigan at Ann Arbor - Economics Department; National Bureau of Economic Research (NBER)

Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy; National Bureau of Economic Research (NBER); University of Michigan at Ann Arbor - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 2012

Abstract

The very poor in developing countries often make intertemporal choices that seem at odds with their individual self-interest. There are many possible reasons why. We investigate several of these reasons with a lab-in-the-field experiment in rural Malawi involving large stakes. We make two contributions. First, we construct a new dependent variable: revisions of prior choices regarding the allocation of future income. This allows us to directly examine intertemporal choice revision and its determinants. In particular, this dependent variable permits a novel test for the existence of self-control problems: we find that revisions of money allocations toward the present are positively associated with measures of present-bias from an earlier baseline survey, as well as the (randomly assigned) closeness in time to the first possible date of money disbursement. Second, we investigate other potential determinants of revision, aside from self-control problems. We find little evidence that revisions of money allocations toward the present are associated with spousal preferences for such revision, household shocks or the financial sophistication of respondents.

Suggested Citation

Gine, Xavier and Goldberg, Jessica and Silverman, Dan and Yang, Dean and Yang, Dean, Revising Commitments: Field Evidence on the Adjustment of Prior Choices (May 2012). NBER Working Paper No. w18065, Available at SSRN: https://ssrn.com/abstract=2056693

Xavier Gine (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

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Jessica Goldberg

University of Maryland, Department of Economics ( email )

College Park, MD 20742
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Dan Silverman

University of Michigan at Ann Arbor - Economics Department ( email )

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Ann Arbor, MI 48109
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HOME PAGE: http://www.econ.lsa.umich.edu/

National Bureau of Economic Research (NBER)

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Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy ( email )

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Ann Arbor, MI 48109
United States
734-764-6158 (Phone)

HOME PAGE: http://www.umich.edu/~deanyang/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Michigan at Ann Arbor - Department of Economics

611 Tappan Street
Ann Arbor, MI 48109-1220
United States