Does nurture matter : theory and experimental investigation on the effect of working environment on risk and time preferences
Date of Issue2011
College of Humanities, Arts, and Social Sciences
Building upon the reference dependent preferences model, we develop a theoretical framework to examine the relationship between environment and preferences. To verify the model’s prediction, we use a combined artefactual field experiment and household survey data in Vietnam to investigate whether involvement is risky and has long-run targeted benefits, thereby causing fishermen to exhibit different risk and time preferences than workers in other occupations. Using a structural model approach, we integrate prospect theory and hyperbolic time discounting into a single framework, to simultaneously estimate and correlate the parameters of both risk and time preferences with other demographic variables. The key finding that fishermen are found to be less risk-averse and more patient than others asserts the theoretical prediction about the influence of the working environment on preferences.
DRNTU::Social sciences::Economic development::Vietnam
Journal of risk and uncertainty
© 2011 Springer Science+Business Media, LLC. This is the author created version of a work that has been peer reviewed and accepted for publication by Journal of risk and uncertainty, Springer. It incorporates referee’s comments but changes resulting from the publishing process, such as copyediting, structural formatting, may not be reflected in this document. The published version is available at DOI: [http://dx.doi.org/10.1007/s11166-011-9130-4].