Search

Begin New Search Topic Behavior Publishing Institution Institute for Advanced Development Studies (INESAD)

1. Peer Effects in Risk Aversion

Author:
Ana Balsa, Néstor Gandelman, and Nicolás González
Publication Date:
11-2012
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
Using data on Uruguayan adolescents, we estimate peer effects in risk attitudes. Relative risk aversion is elicited in an experimental setting. Identification is based on parents not being able to choose the class within the school of their choice. After controlling for school-grade fixed effect and addressing endogeneity due to simultaneity, we find a significant and quantitative large impact of peers on individuals risk aversion. An increase in one standard deviation of the group risk aversion produces an increase in 44-64% on an individual risk aversion. These findings enhance the importance of multiplicative effects related to risk behavior.
Topic:
Risk, Behavior, and Schools
Political Geography:
South America and Uruguay

2. The Impact of Aid on Recipient Behavior: A Micro-Level Dynamic Analysis of Remittances, Schooling, Work, Consumption, Investment and Social Mobility in Nicaragua

Author:
Lykke E. Andersen, Bent Jesper Christensen, and Oscar Molina Tejerina
Publication Date:
12-2005
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
Remittances are a very important source of income for many Nicaraguan families. More than 40% of all households receive remittances that on average amount to 12-15% of total household income in these households. More than 30% of these households receive remittances at least monthly, implying that it is a relatively stable source of income. This paper shows that remittances do tend to reduce the vulnerability of households and increase their upward social mobility, at least as long as the households do not depend too heavily on remittances. However, remittances also cause moral hazard problems. Nicaraguans tend to reduce their labor supply in response to more remittances, and they also tend to reduce their savings rates, both of which are detrimental to long run economic growth.
Topic:
Foreign Aid, Investment, Behavior, Remittances, and Social Mobility
Political Geography:
Central America and Nicaragua