IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_9484.html
   My bibliography  Save this paper

Emigration Intentions and Risk Aversion: Causal Evidence from Albania

Author

Listed:
  • Michel Beine
  • Gary Charness
  • Arnaud Dupuy

Abstract

Estimating the impact of risk aversion on emigration at the individual level is complicated by selection issues. In this paper, we use original data from Albania on mobility intentions and elicited risk aversion to provide causal estimates on this relationship. Our identification strategy relies on the occurrence of two earthquakes during data collection that unambiguously led to upward shifts in risk aversion as shown in a companion paper (Beine et al., 2021). While OLS estimates fail to capture a (negative) relationship between risk aversion and emigration intention, a Control Function strategy using the two earthquakes as instruments uncovers such a relationship. We argue that our results highlight a new channel through which risk preferences explain the trapped population phenomenon documented in the climate change and migration literature.

Suggested Citation

  • Michel Beine & Gary Charness & Arnaud Dupuy, 2021. "Emigration Intentions and Risk Aversion: Causal Evidence from Albania," CESifo Working Paper Series 9484, CESifo.
  • Handle: RePEc:ces:ceswps:_9484
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp9484.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Holden, Stein T. & Tilahun, Mesfin, 2020. "Endowment Effects and Loss Aversion in the Risky Investment Game," CLTS Working Papers 1/20, Norwegian University of Life Sciences, Centre for Land Tenure Studies.
    2. David A. Jaeger & Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Holger Bonin, 2010. "Direct Evidence on Risk Attitudes and Migration," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 684-689, August.
    3. Dasgupta, Utteeyo & Mani, Subha & Sharma, Smriti & Singhal, Saurabh, 2019. "Internal and external validity: Comparing two simple risk elicitation tasks," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 81(C), pages 39-46.
    4. Uri Gneezy & Jan Potters, 1997. "An Experiment on Risk Taking and Evaluation Periods," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 631-645.
    5. Charness, Gary & Gneezy, Uri & Imas, Alex, 2013. "Experimental methods: Eliciting risk preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 87(C), pages 43-51.
    6. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    7. Guevara, C. Angelo, 2015. "Critical assessment of five methods to correct for endogeneity in discrete-choice models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 82(C), pages 240-254.
    8. Beine, Michel & Charness, Gary & Dupuy, Arnaud & Joxhe, Majlinda, 2020. "Shaking Things Up: On the Stability of Risk and Time Preferences," IZA Discussion Papers 13084, Institute of Labor Economics (IZA).
    9. Michel Beine & Arnaud Dupuy & Majlinda Joxhe, 2020. "Migration intentions: Data from a Field Study in Albania," DEM Discussion Paper Series 20-14, Department of Economics at the University of Luxembourg.
    10. Goldbach, Carina & Schlüter, Achim, 2018. "Risk aversion, time preferences, and out-migration. Experimental evidence from Ghana and Indonesia," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 132-148.
    11. Roberto Roca Paz & Silke Uebelmesser, 2021. "Risk attitudes and migration decisions," Journal of Regional Science, Wiley Blackwell, vol. 61(3), pages 649-684, June.
    12. Hao, Li & Houser, Daniel & Mao, Lei & Villeval, Marie Claire, 2016. "Migrations, risks, and uncertainty: A field experiment in China," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 126-140.
    13. Klaus Nowotny, 2014. "Cross-border commuting and migration intentions: the roles of risk aversion and time preference," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 8(2), June.
    14. Charness, Gary & Viceisza, Angelino, 2016. "Three Risk-elicitation Methods in the Field - Evidence from Rural Senegal," Review of Behavioral Economics, now publishers, vol. 3(2), pages 145-171, July.
    15. Spitzer, Yannay & Tortorici, Gaspare & Zimran, Ariell, 2020. "International Migration Responses to Natural Disasters: Evidence from Modern Europe’s Deadliest Earthquake," CEPR Discussion Papers 15008, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Matthias Huber & Till Nikolka & Panu Poutvaara & Ann-Marie Sommerfeld & Silke Uebelmesser, 2022. "Migration Aspirations and Intentions," CESifo Working Paper Series 9708, CESifo.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Beine, Michel & Charness, Gary & Dupuy, Arnaud & Joxhe, Majlinda, 2020. "Shaking Things Up: On the Stability of Risk and Time Preferences," IZA Discussion Papers 13084, Institute of Labor Economics (IZA).
    2. Shamsuddin, Mrittika & Katsaiti, Marina Selini & El Anshasy, Amany A., 2022. "Income rank and income concerns: What correlates with international migration intentions?," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 490-505.
    3. Jordan Bisset & Dirk Czarnitzki & Thorsten Doherr, 2022. "High Skilled Mobility Under Uncertainty," Working Papers of Department of Management, Strategy and Innovation, Leuven 700195, KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven.
    4. Klöble, Katrin, 2021. "A behavioural perspective on the drivers of migration: Studying economic and social preferences using the Gallup World Poll," IDOS Discussion Papers 4/2021, German Institute of Development and Sustainability (IDOS).
    5. Utteeyo Dasgupta & Subha Mani & Smriti Sharma & Saurabh Singhal, 2022. "Effects of Peers and Rank on Cognition, Preferences, and Personality," The Review of Economics and Statistics, MIT Press, vol. 104(3), pages 587-601, May.
    6. repec:cup:judgdm:v:16:y:2021:i:5:p:1290-1313 is not listed on IDEAS
    7. Roberto Roca Paz & Silke Uebelmesser, 2021. "Risk attitudes and migration decisions," Journal of Regional Science, Wiley Blackwell, vol. 61(3), pages 649-684, June.
    8. Collier, Trevor & Cotten, Stephen & Roush, Justin, 2022. "Using pandemic behavior to test the external validity of laboratory measurements of risk aversion and guilt," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 101(C).
    9. Anwesha Bandyopadhyay & Lutfunnahar Begum & Philip J. Grossman, 2021. "Gender differences in the stability of risk attitudes," Journal of Risk and Uncertainty, Springer, vol. 63(2), pages 169-201, October.
    10. Gibson, John & McKenzie, David & Rohorua, Halahingano & Stillman, Steven, 2019. "The long-term impact of international migration on economic decision-making: Evidence from a migration lottery and lab-in-the-field experiments," Journal of Development Economics, Elsevier, vol. 138(C), pages 99-115.
    11. Mohan, Sarah, 2020. "Risk aversion and certification: Evidence from the Nepali tea fields," World Development, Elsevier, vol. 129(C).
    12. González Chapela, Jorge, 2020. "Patience goes a long way: Evidence from Spain," MPRA Paper 98711, University Library of Munich, Germany.
    13. Gary Charness & Catherine Eckel & Uri Gneezy & Agne Kajackaite, 2018. "Complexity in risk elicitation may affect the conclusions: A demonstration using gender differences," Journal of Risk and Uncertainty, Springer, vol. 56(1), pages 1-17, February.
    14. Gibson, John & McKenzie, David & Rohorua, Halahingano & Stillman, Steven, 2020. "Reprint of: The long-term impact of international migration on economic decision-making: Evidence from a migration lottery and lab-in-the-field experiments," Journal of Development Economics, Elsevier, vol. 142(C).
    15. Brañas-Garza, Pablo & Estepa-Mohedano, Lorenzo & Jorrat, Diego & Orozco, Victor & Rascón-Ramírez, Ericka, 2021. "To pay or not to pay: Measuring risk preferences in lab and field," Judgment and Decision Making, Cambridge University Press, vol. 16(5), pages 1290-1313, September.
    16. Gary Charness & Nir Chemaya & Dario Trujano-Ochoa, 2023. "Learning your own risk preferences," Journal of Risk and Uncertainty, Springer, vol. 67(1), pages 1-19, August.
    17. Jorge González Chapela, 2022. "Is there a patience premium on migration?," Empirical Economics, Springer, vol. 63(4), pages 2025-2055, October.
    18. Bruns, Selina JK & Hermann, Daniel & Musshoff, Oliver, 2022. "Is gamification a curse or blessing for the design of risk elicitation methods in the field? Experimental evidence from Cambodian smallholder farmers," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322263, Agricultural and Applied Economics Association.
    19. Holden, Stein T. & Tilahun, Mesfin, 2020. "Endowment Effects and Loss Aversion in the Risky Investment Game," CLTS Working Papers 1/20, Norwegian University of Life Sciences, Centre for Land Tenure Studies.
    20. Ranganathan, Kavitha & Lejarraga, Tomás, 2021. "Elicitation of risk preferences through satisficing," Journal of Behavioral and Experimental Finance, Elsevier, vol. 32(C).
    21. Dalton, Patricio S. & Nhung, Nguyen & Rüschenpöhler, Julius, 2020. "Worries of the poor: The impact of financial burden on the risk attitudes of micro-entrepreneurs," Journal of Economic Psychology, Elsevier, vol. 79(C).

    More about this item

    Keywords

    emigration; risk aversion; earthquakes; trapped population phenomenon;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:ces:ceswps:_9484. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.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.