Risk preferences and refugee migration to Europe: An experimental analysis

Daniel Joël Elanga Mendogo and Géraldine Bocquého

European Journal of Political Economy, 2024, vol. 83, issue C

Abstract: Although the large majority of Syrians fleeing the civil war remain in neighbouring or nearby countries, others embark on hazardous land or sea crossings in pursuit of the uncertain prospect of obtaining refugee status in Europe. Understanding in what ways Syrian migrants who stay in nearby countries differ from those who seek asylum in Europe can help to better target European asylum policies. We address this issue by combining two experimental databases of refugees in Egypt and Luxembourg. First, we measure original risk preferences on the Egypt sample and show that Cumulative Prospect Theory (CPT) is better suited for modelling refugee behaviour under risk than Expected Utility Theory (EUT). Second, we compare the risk preference parameters of the two samples under the CPT framework and find that, on average, refugees in Egypt are more loss averse and overweight low probabilities more than their counterparts who migrated to Luxembourg. These results suggest a possible self-selection process among refugees migrating to Europe based on their risk preferences, which challenges current policy schemes.

Keywords: Refugees’ decision making; Asylum policy; Loss aversion; Probability weighting; Perceptions (search for similar items in EconPapers)
JEL-codes: C93 D81 F22 K37 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Risk preferences and refugee migration to Europe: An experimental analysis (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:83:y:2024:i:c:s0176268024000466

DOI: 10.1016/j.ejpoleco.2024.102544

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