On the sources of risk preferences in rural Vietnam

Duc Anh Dang

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, I provide a new empirical evidence that natural environment can shape individual risk preferences. By combining historical data on climate variation and contemporary survey questions on risk aversion, I find that risk aversion is significantly different for people who live in areas that have suffered high frequency of natural disasters. In particular, individuals highly affected by climate volatility show a long term risk aversion. The finding also supports the hypothesis that when people used to live in risky environment, an incremental increase in risk affects their risk preferences less.

Keywords: Climate variation; risk aversion; Vietnam (search for similar items in EconPapers)
JEL-codes: D03 O53 Q54 (search for similar items in EconPapers)
Date: 2012-04
New Economics Papers: this item is included in nep-agr, nep-dev, nep-env, nep-evo and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:38738

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