Choice Under Uncertainty: Evidence from Ethiopia, India and Uganda

25 Pages Posted: 10 Feb 2010

See all articles by Glenn W. Harrison

Glenn W. Harrison

Georgia State University - J. Mack Robinson College of Business

Steven J. Humphrey

University of Nottingham - School of Economics

Arjan Verschoor

University of East Anglia (UEA)

Abstract

We review experimental evidence collected from risky choice experiments using poor subjects in Ethiopia, India and Uganda. Using these data we estimate that just over 50% of our sample behaves in accordance with expected utility theory and that the rest subjectively weight probability according to prospect theory. Our results show that inferences about risk aversion are robust to whichever model we adopt when we estimate each model separately. However, when we allow both models to explain portions of the data simultaneously, we infer risk aversion for subjects behaving according to expected utility theory and risk-seeking behaviour for subjects behaving according to prospect theory.

Suggested Citation

Harrison, Glenn William and Humphrey, Steven J. and Verschoor, Arjan, Choice Under Uncertainty: Evidence from Ethiopia, India and Uganda. The Economic Journal, Vol. 120, No. 543, pp. 80-104, March 2010, Available at SSRN: https://ssrn.com/abstract=1550485 or http://dx.doi.org/10.1111/j.1468-0297.2009.02303.x

Glenn William Harrison (Contact Author)

Georgia State University - J. Mack Robinson College of Business ( email )

P.O. Box 4050
Atlanta, GA 30303-3083
United States
407-489-3088 (Phone)
253-830-7636 (Fax)

HOME PAGE: http://www.cear.gsu.edu/

Steven J. Humphrey

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Arjan Verschoor

University of East Anglia (UEA) ( email )

Norwich Research Park
Norwich, Norfolk NR4 7TJ
United Kingdom

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