IDEAS home Printed from https://ideas.repec.org/a/oup/jafrec/v28y2019i1p18-38..html
   My bibliography  Save this article

Consumption Discount Rates, Risk Aversion and Wealth in Low-Income Countries: Evidence from a Field Experiment in Rural Ethiopia

Author

Listed:
  • Mahmud Yesuf
  • Randall Bluffstone

Abstract

It has been argued that people in low-income countries often have high consumption discount rates (CDRs), which contributes to under-investment in capital, such as education and soil conservation. We use a field experiment to estimate CDRs in rural Ethiopia and find that annual rates range from 43% to 106%. We evaluate whether household wealth affects CDRs and test for synergies with field experiment-derived estimates of risk aversion. We find evidence that respondents who are part of wealthier households have lower CDRs and more risk averse respondents have higher rates.

Suggested Citation

  • Mahmud Yesuf & Randall Bluffstone, 2019. "Consumption Discount Rates, Risk Aversion and Wealth in Low-Income Countries: Evidence from a Field Experiment in Rural Ethiopia," Journal of African Economies, Centre for the Study of African Economies, vol. 28(1), pages 18-38.
    • Handle: RePEc:oup:jafrec:v:28:y:2019:i:1:p:18-38.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/jae/ejy010
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sommervoll, Dag Einar & Holden, Stein T. & Tilahun, Mesfin, 2023. "Intertemporal Choice Lists and Maximal Likelihood Estimation of Discount Rates," CLTS Working Papers 9/23, Norwegian University of Life Sciences, Centre for Land Tenure Studies.
    2. Holden, Stein T. & Tilahun, Mesfin & Sommervoll, Dag Einar, 2020. "Magnitude Effects and Utility Curvature in Inter-temporal Choice," CLTS Working Papers 8/20, Norwegian University of Life Sciences, Centre for Land Tenure Studies.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:jafrec:v:28:y:2019:i:1:p:18-38.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/csaoxuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.