individual risk attitudes measurement determinants and behavioral consequences this paper studies risk attitudes using a large representative survey and a complementary experiment conducted with a representative subject pool in subjects homes using a question asking people about their willingness to take risks in general we find that gender age height and parental background have an economically significant impact on willingness to take risks the experiment confirms the behavioral validity of this measure using paid lottery choices turning to other questions about risk attitudes in specific contexts we find similar results on the determinants of risk attitudes and also shed light on the deeper question of stability of risk attitudes across contexts we conduct a horse race of the ability of different measures to explain risky behaviors such as holdings stocks occupational choice and smoking the question about risk taking in general generates the best all round predictor of risky behavior

maskin s theorem with limited veto power abstract we weaken the no veto power condition of maskin maskin e 1999 nash equilibrium and welfare optimality rev econ stud 66 23 38 to limited veto power and prove that any monotonic social choice rule is nash implementable if it satisfies this weaker condition the result is obtained by using the canonical maskin mechanism without modification an immediate corollary is that the weak core is nash implementable in any coalitional game environment an example is given to show that the strong core need not be implementable even when it is monotonic

understanding the process of agricultural technology adoption mineral fertilizer in eastern dr congo summary we analyze the adoption of mineral fertilizer in south kivu we model technology adoption as a three step process including awareness tryout and adoption and empirically analyze these steps using cross sectional farm household data and bivariate and heckman selection probit models we find that awareness about fertilizer is high 57 and mainly determined by education and social capital tryout is low 13 of aware farmers but positively influenced by extension interventions continued adoption is high 70 of tryout farmers but capital constraints are important and not all extension interventions are effective for continued adoption our results entail implications for extension policies in poor areas

epsilon nash implementation this paper provides necessary and sufficient conditions for a social choice correspondence to be implementable via epsilon nash equilibrium when agents preferences can be represented by cardinal utilities our results also display robustness of maskin s seminal result on nash implementation

international diversification of investment portfolios u s and japanese perspectives in this paper we analyze the gains from international diversification of investment portfolios from the japanese as well as the u s perspectives the major findings of this paper include first the potential gains from international as opposed to purely domestic diversification are much greater for u s investors than for japanese investors for u s investors the gains accrue not so much in terms of lower risk as in terms of higher return and the opposite holds for japanese investors second using various ex ante international investment strategies designed to control parameter uncertainty u s investors can realize substantial gains from international diversification in out of sample periods japanese investors however can gain relatively little third hedging exchange risk generally allows the u s but not japanese investors to benefit more from international diversification for u s investors the international bond diversification with exchange risk hedging offers a superior risk return trade off than the international stock diversification with or without hedging

theories of poverty traps and anti poverty policies in this paper we provide a conceptual overview of alternative mechanisms leading to poverty traps at the individual level making a distinction between those that are due to external frictions e g market failure and those that are due to behavior under extreme scarcity in the absence of any frictions we develop a common theoretical framework to examine alternative scenarios characterizing conditions under which poverty traps in the sense of multiple stable steady states arise as opposed to possibly conditional convergence to a unique steady state we apply this framework to discuss the relative merits of alternative anti poverty policies such as unconditional and conditional cash transfers and direct interventions aimed at improving market access to the poor or improving public service delivery jel codes d13 d23 o12 o15

nash equilibrium and welfare optimality if is a set of social alternatives a social choice rule scr assigns a subset of a to each potential profile of individuals preferences over a where the subset is interpreted as the set of welfare optima a game form or mechanism implements the social choice rule if for any potential profile of preferences 1 any welfare optimum can arise as a nash equilibrium of the game form implying in particular that a nash equilibrium exists and 2 all nash equilibria are welfare optimal the main result of this paper establishes that any scr that satisfies two properties monotonicity and no veto power can be implemented by a game form if there are three or more individuals the proof is constructive

the last mile s in modern input distribution pricing profitability and adoption increasing adoption of modern inputs remains one of the best hopes for greater agricultural production in developing countries based on unique data from northwestern ethiopia this study examines the last mile s from the input distribution center to the farmer in the chemical fertilizer and improved seed distribution system we find that increasing transaction and transportation costs over a 35 km distance along a route mainly accessible to only foot traffic lead to a 50 increase of the price of chemical fertilizer and to a 75 reduction in its use farmers who live about 10 km from the distribution center face per unit transaction and transportation costs as high as the costs needed to bring the fertilizer from the international port to the input distribution center about 1 000 km tackling the last mile s costs should thus be a priority to improve modern input adoption and use in these settings

rural finance and agricultural technology adoption in ethiopia does the institutional design of lending organizations matter summary it has now become almost a stylized fact that sustained agricultural growth is central to rapid poverty reduction and economic development yet world poverty is largely concentrated in the agrarian societies which have the potential for agricultural productivity growth this is particularly true for sub saharan african countries where the gaps between potential and actual yields remain high minimizing this gap through the promotion of modern inputs such as fertilizer and modern seeds has been at the core of almost all development strategies in ethiopia among other initiatives the country has promoted microfinance institutions and member owned financial cooperatives to alleviate credit constraints of the smallholder farmers this paper analyzes the impacts of these institutions using household survey data and a propensity score matching technique we examine the effects that institutional financial services have on farmers adoption of agricultural technology in ethiopia the results suggest that access to institutional finance has a significant positive impact on both the adoption and extent of technology use however when impacts are disaggregated by type of financial institution and farm size heterogeneities are observed in particular financial cooperatives have a greater impact on technology adoption than microfinance institutions and the results appear to vary depending on farm size and types of inputs the paper concludes with implications for policies to promote adoption of modern agricultural inputs

nash implementation using undominated strategies we study the problem of implementing social choice correspondences using the concept of undominated nash equilibrium i e nash equilibrium in which no one uses a weakly dominated strategy we show that this mild refinement of nash equilibrium has a dramatic impact on the set of implementable correspondences our main result is that if there are at least three agents in the society then any correspondence which satisfies the usual no veto power condition is implementable unless some agents are completely indifferent over all possible outcomes many common welfare criteria such as the pareto correspondence and several familiar voting rules such as majority and plurality rules satisfy our conditions this possibility result stands in sharp contrast to the more restrictive findings with implementation in either nash equilibrium or subgame perfect equilibrium we present several examples to illustrate the difference between undominated nash implementation and implementation with alternative solution concepts

the impact of psychological and human capital on wages historically economists have taken the position that psychological capital is either unobservable or immeasurable thus heretofore little evidence has been available on the contribution of psychological capital to wages using data drawn from two different waves of the national longitudinal survey of youth we offer evidence that psychological capital has both a direct effect via self esteem and an indirect effect through locus of control on an individual s real wage we find a person s wage is more sensitive to changes in self esteem than to comparable alterations in human capital both relative wages and human capital contribute to self esteem

returns to spending on agricultural extension the case of the national agricultural advisory services naads program of uganda the aim of this paper is to assess the direct and indirect impacts of the agricultural extension system of uganda the national agricultural advisory services naads program on household agricultural income data from two rounds of surveys of ugandan rural farm households conducted in 2004 and 2007 as well as different program evaluation methods and model specifications are used to estimate impacts and compute a rate of return the direct and indirect impact of the program is estimated at 37 95 and 27 55 increase in per capita agricultural gross revenue between 2004 and 2007 for households participating directly and indirectly in the program respectively compared to nonparticipants the rate of return on the program s expenditures is estimated at 8 49 the program has been relatively more effective among male headed larger and asset poor households as well as those taking up noncrop high value enterprises and living further away from financial services all weather roads and markets or located in the eastern and northern regions policy implications of the results are drawn

locus of control and technology adoption in developing country agriculture evidence from ethiopia abstract we investigate the implication of farmers locus of control on their technology adoption decisions our empirical analysis is based on two longitudinal surveys and hypothetical choice exercises conducted on ethiopian farmers we find that locus of control significantly predicts farmers technology adoption decisions including use of chemical fertilizers improved seeds and irrigation we show that individuals with an internal locus of control have higher propensity of adopting agricultural technologies we observe these empirical regularities in both datasets and for both revealed measures of farmers technology adoption decisions as well as farmers hypothetical demand for agricultural technology the results hold even in a more conservative fixed effects estimation approach assuming locus of control as time variant and dynamic behavioral trait these findings provide behavioral and psychological explanations for the low rates of adoption of profitable agricultural technologies in sub saharan africa our results highlight that improving farmers non cognitive skills locus of control may facilitate technology adoption and agricultural transformation more generally the results suggest that anti poverty policies that only focus on relaxing short term external constraints including physical access to markets and technologies may not sufficiently alleviate agricultural underinvestment

neighbors and extension agents in ethiopia who matters more for technology adoption improving agricultural productivity is seen as vital to economic growth in poor countries particularly in sub saharan africa where productivity growth has lagged behind that of other continents the focus has therefore been on new technologies particularly the adoption and diffusion of improved seed varieties and the increased use of fertiliser supported by investments in effective extension services it is important to understand how these new technologies spread and the effectiveness of extension services in this process

the role of education in facilitating risk taking and innovation in agriculture the impact of education on farmers attitudes toward endogenous risk measured using an attitude survey instrument is estimated with household data from rural ethiopia education of the household head is found to decrease risk aversion next the effects of education and risk attitudes on technology adoption are estimated schooling encourages farmers to adopt innovations whereas risk aversion reduces the probability of adoption thus we find that schooling encourages innovation a potentially risky undertaking not only directly but also indirectly through its effect upon attitudes toward risk to the extent that educated farmers are early innovators and are copied by those with less schooling as other research on the same data has shown the reduction of riskaversion not only has private benefits for those with education but also may have externality benefits

the effect of marketing messages and payment over time on willingness to pay for fuel efficient cookstoves abstract smoke from inefficient biomass cookstoves contributes to global climate change and kills approximately four million people per year cooking technologies such as manufactured fuel efficient cookstoves that mitigate the negative effects of traditional cookstoves exist but adoption rates are low the international development community debates whether this low adoption of fuel efficient cookstoves is due to a lack of adequate product information or due to household financial constraints we ran vickery second price auctions in rural uganda to elicit willingness to pay for fuel efficient cookstoves comparing the effect of informational marketing messages and time payments on willingness to pay a randomized trial tested the following marketing messages this stove can improve health this stove can save time and money and both messages combined none of the messages consistently increased willingness to pay in a second experiment we compared willingness to pay for two different contracts one with payment due within a week and one with equal installment payments over 4 weeks consistent with household financial constraints time payments raised willingness to pay by 40

the complex dynamics of smallholder technology adoption the case of sri in madagascar this article explores the dynamics of smallholder technology adoption with particular reference to a high yielding low external input rice production method in madagascar we present a simple model of technology adoption by farm households in an environment of incomplete financial and land markets we then use a probit model and symmetrically censored least squares estimation of a dynamic tobit model to analyze the decisions to adopt expand and disadopt the method we find that seasonal liquidity constraints discourage adoption by poorer farmers learning effects both from extension agents and from other farmers exert significant influence over adoption decisions

a behavioral economics view of poverty standard theorizing about poverty falls into two camps social scientists regard the behaviors of the economically disadvantaged either as calculated adaptations to prevailing circumstances or as emanating from a unique culture of poverty rife with deviant values the first camp presumes that people are highly rational that they hold coherent and justified beliefs and pursue their goals effectively without mistakes and with no need for help the second camp attributes to the poor a variety of psychological and attitudinal short fallings that render their views often misguided and their choices fallible leaving them in need of paternalistic guidance we propose a third view the behavioral patterns of the poor we argue may be neither perfectly calculating nor especially deviant rather the poor may exhibit the same basic weaknesses and biases as do people from other walks of life except that in poverty with its narrow margins for error the same behaviors often manifest themselves in more pronounced ways and can lead to worse outcomes in what follows we illustrate the kinds of insights that might be gained from a behaviorally more realistic analysis of the economic conditions of the poor and we propose that alternative policies for alleviating poverty be considered

time preference noncognitive skills and well being across the life course do noncognitive skills encourage healthy behavior a number of prominent diseases are influenced by health behaviors for example it is well known that the decision to smoke comes with considerable risks of developing smoking related ailments such as lung cancer emphysema and heart disease obesity is another health condition that can be costly it is associated with increased risk for diseases such as coronary heart disease and diabetes centers for disease control 2009 nationally it is estimated that about one third of the u s population is obese and estimates suggest that obesity costs society anywhere from 27 to 47 billion in health care expenditures annually centers for disease control 2009 national center for health statistics 2008 research suggests that changing individuals diets and getting them to exercise would help to reduce the prevalence of obesity in society melayne mcinnes and judith shinogle 2009 smoking and obesity provide just two examples of cases in which the nation s burden of disease is influence by behaviors that its citizens engage in because the united states spends a large share of gdp on health care each year understanding the determinants of health behaviors is important as it may allow scholars to identify ways to reduce these costs this paper examines the relationship between individuals health behaviors and the non cognitive skills that individuals possess in the past decade the economics discipline has seen a burst of interest in human capabilities that contribute to labor market productivity beyond the usual foci of attention levels of education and learning by doing the collection of personality traits soft skills incentive enhancing preferences and socio emotional factors that economists are now studying has been loosely grouped together under the heading non cognitive skills 1 while the term may be something of a misnomer because many of the worker attributes that the authors writing in this subfield are interested in require reasoning or cognition the skills of interest have been found to be important determinants of labor market success james heckman jora stixrud and sergio urzua 2006 samuel bowles herbert gintis and melissa osborne 2001 2james heckman 2007 has stated that these socio emotional attributes as non cognitive skills are sometimes called are also likely to affect health behaviors this paper tests this hypothesis it provides a theoretical and an empirical analysis of the connection between socio emotional attributes and the choices that individuals make about health it uses data from a large nationally representative dataset to analyze the relationships

can modern input use be promoted without subsidies an analysis of fertilizer in ethiopia fertilizer use in ethiopia has nearly quintupled since official elimination of direct input subsidies in the early 1990s during this time policies changed from liberalization with both private and public sector participation to a government monopoly over imports along with exclusive marketing through farmers cooperatives this article presents estimates of detail costs and margins in the value chain econometrically derived profitability and yield responses as well as costs of the government s fertilizer promotion policies results suggest that a irrespective of the methods of calculation fertilizer use in major cereal is profitable b while there is no official subsidy program fertilizer promotion has involved large fiscal costs estimated at us 40 million per year since 2008 and c there has been a mismatch between government s policy targets and the effective fertilizer demand resulting in large carryover stock with estimated implicit costs of us 30 million per year during 2008 2011 areas of policy attention value chain improvements and ongoing efforts to improve for fertilizer use and profitability are discussed