Poverty, Seasonal Scarcity and Exchange Asymmetries / Dietmar Fehr, Günther Fink, Kelsey Jack.

Format:

Book

Author/Creator:

Fehr, Dietmar.

Contributor:

National Bureau of Economic Research.

Fink, Günther.

Jack, Kelsey.

Series:

Working Paper Series (National Bureau of Economic Research) no. w26357.

NBER working paper series no. w26357

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2019.

Summary:

A growing literature associates poverty with biases in decision-making. We investigate this link in a sample of over 3,000 small-scale farmers in Zambia, who participated in a series of experiments involving the opportunity to exchange randomly assigned household items for alternative items of similar value. Analyzing a total of 5,842 trading decisions over a range of household items, we show that exchange asymmetries are sizable and remarkably robust across items and experimental procedures. Using cross sectional, seasonal and randomized variation in financial resource availability, we show that exchange asymmetries decrease in magnitude when subjects are more constrained. Consistent with the interpretation that financial constraints increase decision stakes, we also show that trading probabilities increase when the value of the items involved is exogenously increased.

Notes:

Print version record

October 2019.