{"componentChunkName":"component---src-templates-post-query-tsx","path":"/research/poverty-and-probability-aspiration-and-aversion-to-compound-lotteries-in-el-salvador-and-india-3/","result":{"pageContext":{"post":{"slug":"/research/poverty-and-probability-aspiration-and-aversion-to-compound-lotteries-in-el-salvador-and-india-3/","title":"Poverty and Probability: Aspiration and Aversion to Compound Lotteries in El Salvador and India","date":"Jun 30, 2012","timeToRead":1,"description":"Some experimental participants are averse to compound lotteries: they prefer simple lotteries that depend on only one random event, even when the simple lotteries offer lower expected value. This paper proposes that many behavioral “investments” represent more compound risk for poorer people – who often face multiple dimensions of deprivation – than for richer people.","body":"function _extends() { _extends = Object.assign || function (target) { for (var i = 1; i < arguments.length; i++) { var source = arguments[i]; for (var key in source) { if (Object.prototype.hasOwnProperty.call(source, key)) { target[key] = source[key]; } } } return target; }; return _extends.apply(this, arguments); }\n\nfunction _objectWithoutProperties(source, excluded) { if (source == null) return {}; var target = _objectWithoutPropertiesLoose(source, excluded); var key, i; if (Object.getOwnPropertySymbols) { var sourceSymbolKeys = Object.getOwnPropertySymbols(source); for (i = 0; i < sourceSymbolKeys.length; i++) { key = sourceSymbolKeys[i]; if (excluded.indexOf(key) >= 0) continue; if (!Object.prototype.propertyIsEnumerable.call(source, key)) continue; target[key] = source[key]; } } return target; }\n\nfunction _objectWithoutPropertiesLoose(source, excluded) { if (source == null) return {}; var target = {}; var sourceKeys = Object.keys(source); var key, i; for (i = 0; i < sourceKeys.length; i++) { key = sourceKeys[i]; if (excluded.indexOf(key) >= 0) continue; target[key] = source[key]; } return target; }\n\n/* @jsxRuntime classic */\n\n/* @jsx mdx */\nvar _frontmatter = {\n  \"title\": \"Poverty and Probability: Aspiration and Aversion to Compound Lotteries in El Salvador and India\",\n  \"date\": \"2012-06-30\",\n  \"template\": \"post\",\n  \"slug\": \"poverty-and-probability-aspiration-and-aversion-to-compound-lotteries-in-el-salvador-and-india-3\",\n  \"postedLink\": \"https://riceinstitute.org/research/poverty-and-probability-aspiration-and-aversion-to-compound-lotteries-in-el-salvador-and-india-3/\",\n  \"description\": \"Some experimental participants are averse to compound lotteries: they prefer simple lotteries that depend on only one random event, even when the simple lotteries offer lower expected value. This paper proposes that many behavioral “investments” represent more compound risk for poorer people – who often face multiple dimensions of deprivation – than for richer people.\",\n  \"tags\": \"Research\",\n  \"banner\": \"\"\n};\nvar layoutProps = {\n  _frontmatter: _frontmatter\n};\nvar MDXLayout = \"wrapper\";\nreturn function MDXContent(_ref) {\n  var components = _ref.components,\n      props = _objectWithoutProperties(_ref, [\"components\"]);\n\n  return mdx(MDXLayout, _extends({}, layoutProps, props, {\n    components: components,\n    mdxType: \"MDXLayout\"\n  }), mdx(\"p\", null, \"Author: Dean Spears\"), mdx(\"p\", null, \"Published in: \", mdx(\"em\", {\n    parentName: \"p\"\n  }, \"Experimental Economics\")), mdx(\"p\", null, mdx(\"a\", {\n    parentName: \"p\",\n    \"href\": \"https://github.com/riceinstitute/content/blob/release/research/spears-2011-poverty-and-probability-aspiration-and-aversion-to-compound-lotteries-inel-salvador-and-india.pdf\",\n    \"target\": \"_blank\",\n    \"rel\": \"noopener noreferrer\"\n  }, \"Download Paper\")), mdx(\"p\", null, \"Abstract:\"), mdx(\"p\", null, \"Some experimental participants are averse to compound lotteries: they prefer simple lotteries that depend on only one random event, even when the simple lotteries offer lower expected value. This paper proposes that many behavioral \\u201Cinvestments\\u201D represent more compound risk for poorer people \\u2013 who often face multiple dimensions of deprivation \\u2013 than for richer people. As a result, identical aversion to compound lotteries can prevent investment among poorer people, but have no effect on richer people. \"), mdx(\"p\", null, \"The paper reports five studies: two initial studies that document that aversion to compound lotteries operates as an economic preference, two \\u201Claboratory experiments in the field\\u201D in El Salvador, and one internet survey experiment in India. Poorer Salvadoran women who choose a compound lottery are 27 percentage points more likely to have found formal employment than those who chose a simple lottery, but lottery choice is unrelated to employment for richer women. \"), mdx(\"p\", null, \"Poorer students at the national Salvadoran university choose more compound lotteries than richer students, on average, implying that aversion to compound lotteries screened out poorer aspirants but not richer ones. Poorer and lower-caste Indian participants who choose compound lotteries are more likely than those who choose simple lotteries to have a different occupation than their parents, which is not the case for better-off participants. \"), mdx(\"p\", null, \"These findings that the consequences of aversion to compound lotteries are different in the context of poverty and disadvantage are robust to regression respecifications and the inclusion of covariate controls, including for academic and math ability and demographic heterogeneity.\"));\n}\n;\nMDXContent.isMDXComponent = true;","tags":[{"name":"Research","slug":"research"}],"banner":null}}},"staticQueryHashes":["318001574","3787687951","3787687951"]}