Thursday, July 14, 2011


PUBLICATIONS: 2 New IFPRI Discussion Papers on Collusion & Trust and Self-Efficacy & Aspirations

Two recent IFPRI Discussion papers may be of interest to CAPRi readers. Maximo Torero and Angelino Viceisza use evidence from a field experiment in Vietnam to examine potential collusion and trust.

We conduct framed trust games using contract dairy farmers in Vietnam as first movers to assess the impact of potential collusion on trust. Disaggregated analysis suggests that female farmers are more likely to trust overall, but are also more responsive to the addition of a third party and potential collusion. A third party induces them to trust at higher levels, but potential collusion between the trustee and the third party also induces them to trust at lower levels. Our findings corroborate well with existing studies on gender differences in decision making, which suggest that women’s social preferences are more context-specific than men’s.

In another paper, Tanguy Bernard, Stefan Dercon, and Alemayehu Seyoum Taffesse undertake an empirical exploration of self-efficacy and aspirations failure in Ethiopia.

Fatalism is considered pervasive, especially in many poor communities. In this paper, we explore whether fatalistic beliefs have implications for the attitudes and behavior of poor rural households toward investment in the future. To explore the idea of fatalism, we draw inspiration from theories in psychology focusing on the role of locus of control and self-efficacy and also from the theoretical framework of aspiration failure as developed in recent economic literature. Using survey data from rural Ethiopia, we find evidence of fatalistic beliefs among a substantial group of rural households, as well as indicators consistent with narrow aspirations gap and low self-efficacy. We also find that such beliefs consistently correlate with lower demand for credit, in terms of loan size, repayment horizon, and productive purposes.

Both papers are available for free download via the links above.

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