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

36 Pages Posted: 21 Jan 2006

See all articles by Tomomi Tanaka

Tomomi Tanaka

The World Bank

Colin Camerer

California Institute of Technology - Division of the Humanities and Social Sciences

Quang Nguyen

Nanyang Technological University (NTU)

Abstract

We conducted experiments in Vietnamese villages to investigate how wealth, political history, occupation, and other demographic variables (taken from a comprehensive earlier household survey) are correlated with risk and time discounting measured in experiments. Experimental results show that in villages with higher mean income, people are less loss-averse and more patient. Villagers in the north who had worked on collective farms and received food from the government on a regular basis are less averse to loss.

We expand measurements of risk and time preferences beyond expected utility and exponential discounting, replacing those simple approximations with prospect theory and a three-parameter hyperbolic discounting model.

Keywords: Prospect theory, Time discounting, Field experiment

JEL Classification: C93, D81

Suggested Citation

Tanaka, Tomomi and Camerer, Colin F. and Nguyen, Quang, Risk and Time Preferences: Experimental and Household Survey Data from Vietnam. Available at SSRN: https://ssrn.com/abstract=877229 or http://dx.doi.org/10.2139/ssrn.877229

Tomomi Tanaka (Contact Author)

The World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Colin F. Camerer

California Institute of Technology - Division of the Humanities and Social Sciences ( email )

1200 East California Blvd.
Pasadena, CA 91125
United States
626-395-4054 (Phone)
626-432-1726 (Fax)

Quang Nguyen

Nanyang Technological University (NTU) ( email )

S3 B2-A28 Nanyang Avenue
Singapore, 639798
Singapore

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