Modelling refugee migration under cognitive biases: Experimental evidence and policy

Jenny Helstroffer, Majlinda Joxhe, Marc Deschamps, Julien Jacob () and Géraldine Bocquého
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Jenny Helstroffer: BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Julien Jacob: BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: In this paper, we develop a model for refugee migration. As refugees' migration choices are made in a risk-laden environment, we compare two different theoretical frameworks of decision making under risk, namely Expected Utility Theory (EUT) and Cumulative Prospect Theory (CPT). This last framework accounts for a reference point, loss aversion, and probability distortion. We estimate refugees' risk and time preference parameters using field experimental data and show CPT better explains refugees' risk behaviour on average. We also investigate policy implications based on simulations. We show that, under CPT, compared to standard EUT, the value of migrating is consistently lower and the migration decision is more sensitive to policy changes. Our results suggest refugees may self-select based on their risk preferences, those exhibiting more loss aversion or less probability sensitivity being more likely to renounce migration as a reaction to migration policies.

Keywords: Refugee migration; Risk preferences; Experimental economics; Cumulative; Prospect Theory (search for similar items in EconPapers)
Date: 2023-04
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Citations: View citations in EconPapers (1)

Published in Journal of Behavioral and Experimental Economics, 2023, 103, pp.101969. ⟨10.1016/j.socec.2022.101969⟩

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Journal Article: Modelling refugee migration under cognitive biases: Experimental evidence and policy (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03987371

DOI: 10.1016/j.socec.2022.101969

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