Probabilistic Expectations in Developing Countries

Posted: 8 Aug 2014

See all articles by Adeline Delavande

Adeline Delavande

New University of Lisbon - Faculdade de Economia

Date Written: August 2014

Abstract

Many decisions are made under uncertainty, and individuals are likely to form subjective expectations about the probabilities of events that are relevant to their decisions. I review here a recent and growing literature that uses probabilistic expectations elicited from survey respondents in developing countries. I first present an illustrative model of one particular decision under uncertainty — the choice of a college — to exemplify the importance of subjective expectations data for identification purposes. I then review existing evidence emphasizing that it is feasible to elicit probabilities from survey respondents in low-literacy settings and describe common patterns of answers. Finally, I describe existing applications, many of which seek to assess how expectations influence behavior, in various domains, including health, education, agricultural production, and migration.

Suggested Citation

Delavande, Adeline, Probabilistic Expectations in Developing Countries (August 2014). Annual Review of Economics, Vol. 6, pp. 1-20, 2014. Available at SSRN: https://ssrn.com/abstract=2477748 or http://dx.doi.org/10.1146/annurev-economics-072413-105148

Adeline Delavande (Contact Author)

New University of Lisbon - Faculdade de Economia ( email )

Campus de Campolide
Lisboa, 1099-032
Portugal
+35 1 21 380 16 00 (Phone)
+35 1 21 387 09 33 (Fax)

HOME PAGE: http://docentes.fe.unl.pt/~adeline/page2.html

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