Are non-fungible payments attractive when they reduce risk exposure? Evidence from Colombia

Alexander Cano, Darwin Cortés, César Mantilla, Laura Prada and Medardo Restrepo

PLOS ONE, 2024, vol. 19, issue 1, 1-21

Abstract: We conducted a lab-in-the-field experiment in which 214 Colombian rural workers must choose between cash or voucher payment for completing a real effort task. Although the voucher may be perceived as non-fungible, it halves the probability of suffering a negative shock that will reduce the participant’s payment by two-thirds. Participants made four decisions in which we vary the voucher values such that this payment method offers, in expectation, between 88% to 123% of the cash payment (fixed across decisions). We find that uptake rates go from 32% to 56%, from the least to the most generous voucher. These rates are consistently larger compared to a reference sample of undergrad students from the same region (p–values from the χ2 tests for all four decisions fall below 0.035). Our between-subjects variations reveal that presenting the vouchers in descending order yields a higher uptake than the ascending order (p

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0296299

DOI: 10.1371/journal.pone.0296299

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