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Professor Tarp has four decades of experience in academic and applied development economics research and teaching. His field experience covers more than two decades of in-country work in 35 countries across Africa and the developing world more...
This project investigates issues concerning poverty and vulnerability in developing countries building on behavioural economics. The project seeks to derive poverty measures that are based on prospect theory, an alternative model to expected utility theory for decision-making under uncertainty. The new measure takes into account the reference point individuals use when evaluating their wellbeing and the possibility for loss aversion, which highlights the importance of downside risks. These measures are then implemented using panel and cross-section data from developing countries.
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Working Paper
Behavioral DesignSuccessful development programs rely on people to behave and choose in certain ways, and behavioral economics helps us understand why people behave and choose as they do. Approaching problems in development using behavioral economics thus leads to...
Blog
Lessons from Behavioural Economics for Development Policy
23 April 2014 Jukka Pirttilä In conventional economic theory, agents are assumed to be able to make rational choices, unaffected by emotions and not...
Working Paper
Savings By and For the PoorThe poor can and do save, but often use formal or informal instruments that have high risk, high cost, and limited functionality. This could lead to undersaving compared to a world without market or behavioural frictions. Undersaving can have...
Journal Article
Social Capital, Network Effects, and Savings in Rural VietnamPart of Journal Special Issue Poverty, Development, and Behavioral Economics
Journal Article
Savings by and for the PoorPart of Journal Special Issue Poverty, Development, and Behavioral Economics
Journal Article
Introduction: poverty, development, and behavioral economicsPart of Journal Special Issue Poverty, Development, and Behavioral Economics
Journal Article
Behavioral DesignPart of Journal Special Issue Poverty, Development, and Behavioral Economics
Journal Article
Do Non-Enforceable Contracts Matter?Part of Journal Special Issue Poverty, Development, and Behavioral Economics
Journal Article
Aid Distribution and Cooperation in Unequal CommunitiesPart of Journal Special Issue Poverty, Development, and Behavioral Economics
Journal Article
Income Inequality, Redistribution, and PovertyPart of Journal Special Issue Poverty, Development, and Behavioral Economics
Journal Article
Poverty, Vulnerability, and Reference-Dependent UtilityPart of Journal Special Issue Poverty, Development, and Behavioral Economics
Journal Article
Poverty and Welfare Measurement on the Basis of Prospect TheoryPart of Journal Special Issue Poverty, Development, and Behavioral Economics
Journal Special Issue
Poverty, Development, and Behavioral EconomicsThis Special Issue brings together papers from UNU-WIDER Conference on Poverty and Behavioural Economics that were accepted after the peer review process of the journal. The eight papers in this Special Issue all share the objective of exploring the...
Blog
Open Access and UNU-WIDER
21 February 2014 Tony Addison Development researchers live in a world where research on development, not just in economics but also political science...
Working Paper
Poverty, Vulnerability, and Reference Dependent UtilityIn this paper we argue that the recent evidence on individuals’ decision making is of high relevance for the measurement of poverty when switching from a static and certain to a dynamic and uncertain framework. The numerous proposed measures of multi...
Working Paper
Intra-Household EfficiencyAn experimental design using treatments of a voluntary contribution mechanism is used to test household efficiency. Efficiency is decisively rejected in all treatments contrary to the assumption of most household models. Information on initial...
Working Paper
Measuring Economic InsecurityWe provide an axiomatic treatment of the measurement of economic insecurity, assuming that individual insecurity depends on the current wealth level and its variations experienced in the past. The first component plays the role of a buffer stock to...
Working Paper
Ties that BindI present a model of intra-household allocation to show that when income is not perfectly observed by both spouses, hiding of income can occur even when revelation increases bargaining power. I draw data from Ghana and exploit the variation in the...
Working Paper
Livelihood Decisions Under the Shadow of Conflict in the Chittagong Hill Tracts of BangladeshWe analyse rural household livelihood and children’s school enrollment decisions in a post-conflict setting in the Chittagong Hill Tracts region of Bangladesh. The innovation of the paper lies in the fact that we employ information about current...
Working Paper
Poverty and Welfare Measurement on the Basis of Prospect TheoryThis paper examines the measurement of social welfare, poverty and inequality taking into account features that have been found to be important welfare determinants in behavioural economics. Most notably, we incorporate reference-dependence, loss...
Working Paper
Costly PosturingPresenting gifts at funerals, weddings, and other ceremonies held by fellow villagers have been regarded as social norms in Chinese villages for thousands of years. However, it is more burdensome for the poor to take part in these social occasions...
Working Paper
The Effects of Group Composition and Fractionalization in a Public Goods GameBehavioural economics highlights the role of social preferences in economic decisions. Further, populations are heterogeneous; suggesting that group composition may impact the ability to sustain voluntary public goods contributions. This parallels...
Working Paper
Conflicting Measures of Poverty and Inadequate Saving by the PoorIn the presence of inequality a status-driven utility function reconciles the conflict between income-based and nutrition-based measures of poverty. Moreover, it can explain why the poor tend to save less, an established empirical fact in the...
Working Paper
Pro-poor Service Delivery and Social IdentityIndia addressed the requirement for pro-poor service delivery in rural regions by introducing decentralization and affirmative action policies. In order to measure the social preferences of local decision makers, we conducted field experiments which...
Working Paper
Does an Educated Mind Take the Broader View? A Field Experiment on In-group Favouritism among Microcredit ClientsA number of studies document an in-group bias in social dilemma situations. While group structure and dynamics are important in shaping in-group favouritism, less attention has been paid to individual characteristics affecting favouritism. Using data...
Working Paper
Income Inequality, Redistribution and PovertyBased on the standard axiom of individual utility maximization, rational choice has postulated that higher income inequality translates into greater redistribution by shaping the median voter’s preferences. While numerous papers have tested this...
Working Paper
Social Capital, Network Effects and Savings in Rural VietnamInformation failures are a major barrier to formal financial saving in low income countries. Households in rural communities often lack the information necessary to set up formal deposit accounts or are uncertain about the returns to saving formally...
Working Paper
Risk Experiments in Gains and LossesThe aim of this paper is to expand our knowledge on risk aversion among the poor by conducting experiments that do not only test risk aversion in small and large stakes but also in risky gains and risky losses. To our knowledge, this is the first...
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Theme: Past, 2010-11