Non-fungibility reduces the attractiveness of risk-reducing payments among rural workers: a lab-in-the-field experiment in Colombia

We conduct a lab-in-the-field experiment in which 214 Colombian rural workers must choose between cash or a voucher payment for completing a real-effort task. Although the voucher may be perceived as non-fungible, it halves the probability of suffering a negative shock that will reduce the participant's payment by two-thirds. We hold constant the cash payment and explore four different voucher values that, in expectation, range from 88% to 123% of the cash payment. We find that take-up rates go from 32% to 56%, from the least to the more generous voucher. These rates are consistently larger compared to a reference sample of undergrad students from the same region. Our between-subjects variations reveal that presenting the vouchers in descending order yields a higher take-up than the ascending order, which we interpret as an endowment effect of the voucher's risk reduction.