Browsing by Subject "Entscheidungsprozesse innerhalb des Haushalts"

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Risk preferences and intra-household financial decision-making in rural Vietnam : a comparison of their elicitation methods and determinants
(2013) Nielsen, Thea; Zeller, Manfred
Although it is widely accepted that risk preferences and women?s empowerment influence decision making and have tangible outcomes, such as on livelihood strategies, food security, and poverty traps, there is no consensus on their determinants or measurement. Improved methods to elicit risk preferences and decision-making power as well as a better understanding of their determinants can allow development policy to better match smallholders? risk preferences and to increase women?s empowerment. This thesis has two main objectives: 1) To identify influencing factors of risk preferences and intra-household decision-making power based on a conceptual framework; 2) To improve measurements of risk preferences and intra-household decision-making by comparing widely used methods to more innovative ones. Data was collected from both household heads and spouses in a random sample of 300 households, representative of Yen Chau district, Son La Province in northwestern Vietnam. On average, respondents are poor, have a low level of education, worry about food security, produce maize for cash income and rice for home consumption, and rely heavily on social networks to obtain credit. Moreover, households face significant risks from idiosyncratic and covariate shocks. Following an introductory chapter explaining the importance of a better understanding of determinants of risk preferences and decision-making power to improve income and food security of smallholders, the second chapter examines determinants of risk preferences using a cross-section dataset. The chapter compares five widely applied methods to elicit risk preferences (a non-hypothetical lottery game, financial risk tolerance question, self-assessment scale, income gambles, and inheritance gambles) to four innovative methods (yield and price gambles of the main cash crop, maize, and the main food crop, rice). The results show that respondents are, on average, very risk averse. Moreover, correlations between most measures are statistically highly significant, though most are weak, suggesting that measures related to different decision domains should be compared with caution. Based on a conceptual framework, we outline the hypothesized determinants of risk preferences: the decision domain, prior experiences, and the asset base including human, financial, and social capital. We find that gender, age, idiosyncratic shocks, education, social norms, network-reliance with extended family, and connections to local authorities are significant determinants of risk preferences across most elicitation methods. The significance of several social capital proxies suggests that people's risk preferences are embedded in social institutions. Previous studies emphasize that shocks cause households to fall into poverty traps and that households can remain trapped in poverty because of risk aversion, yet previous research has not attempted to discern whether shocks influence risk aversion. The third chapter examines risk preference stability and whether shocks, social capital, and other characteristics change risk preferences between the lean and harvest season. Risk preferences were assessed from the same respondents using three widely applied methods (a lottery game, financial risk tolerance question, and self-assessment scale) and four innovative methods involving yield and price gambles of maize and rice. The results indicate that for all but one assessment method ? the financial risk tolerance question ? risk preferences are not stable between seasons. Respondents became less risk averse according to the lottery game and self-assessment scale, while they became more risk averse according to the rice and maize gambles. Both time-invariant characteristics, such as gender, education and social capital proxies, and time-variant characteristics, such as idiosyncratic and covariate shocks, are significant determinants of risk preference changes between seasons, although determining factors differ by assessment method. The fourth chapter examines influencing factors of wives' empowerment and husbands' dominance in ten financial decisions ? saving, family budgeting, and taking out and repaying four different sized loans. Based on theories and previous research on intra-household decision-making, we hypothesize that individual-, household-, and institutional-level factors may influence women?s decision-making power for financial decisions. We find that wives are less likely to be the primary decision-making for higher-valued loans and that influencing factors of wives' empowerment include her ability to speak Vietnamese, her education, women-controlled income, household income, network-reliance with extended family, and the ratio of children members to all household members. Influencing factors of husbands' dominance in financial decision-making include the wife's inability to speak Vietnamese, his education, the number of other women living in the household, and network-reliance with extended family. These determinants vary by financial decision. The results of this thesis can be used to help households better cope with shocks, encourage investments in new livelihood strategies, improve women's empowerment in specific household financial decisions, and lead to the development of more suitable and informative methods to elicit risk preferences and decision-making power.