Subjective expectation, expected investment return and investment decisions: market imperfections and misperceptions in rural India
Lead Research Organisation:
Institute for Fiscal Studies
Department Name: IFS Research Team
Abstract
Abstracts are not currently available in GtR for all funded research. This is normally because the abstract was not required at the time of proposal submission, but may be because it included sensitive information such as personal details.
Publications
Orazio Attanasio
(2013)
Subjective Expectations and Income Processes in Rural India
Attanasio O
(2018)
Holy Cows or Cash Cows? The Economic Return to Livestock in Rural India
in Economic Development and Cultural Change
Attanasio O
(2016)
Subjective Expectations and Income Processes in Rural India
in Economica
| Description | In this study, we analyze data on subjective expectations that have been elicited from respondents to a survey. The hypothesis of this study was that the information the agents possess and the beliefs they have determine the possible outcomes foreseen and their subjective probabilities. We find that examination of subjective expectations is instructive about the accuracy of these expectations. Detailed analysis gives confidence that answers provided reflect the respondent's believes, which allows us to link expectations to respondents' characteristics, gaining further evidence for their accuracy. Nevertheless, we find expectations about hypothetical outcomes (s.a. investment returns for respondents who did not make the investment) not credible and ascribe this to missing information rather than wrong expectation given that non-hypothetical expectations are found to be sensible. |
| Exploitation Route | The (non-hypothetical) subjective expectations can be used to analyze income formation processes. We do so in a new project, providing strong support that income is persistent in the studied setting. This work has led to further projects that use the subjective expectation data to show how to identify the parameters of a standard dynamic model using a single cross section only. We however further show that this standard model is strongly rejected in our data, proposing a more flexible (non-linear) model. |
| Sectors | Other |
| Description | Improving productivity in developing countries: Identifying bottlenecks and obstacles to investments and technology adoption |
| Amount | £309,441 (GBP) |
| Funding ID | ES/J009253/1 |
| Organisation | Economic and Social Research Council |
| Sector | Public |
| Country | United Kingdom |
| Start | 03/2012 |
| End | 08/2015 |
| Description | Research collaboration - co-author, Manuel Arellano, Professor of Econometrics |
| Organisation | Centre for Monetary and Financial Studies (CEMFI) |
| Country | Spain |
| Sector | Academic/University |
| PI Contribution | We are currently working with Manuel Arellano, Professor of Econometrics, at CEMFI, on a paper that is based on the data collected under this grant, and focuses specifically on furtehr research on subjective expectations. |
| Collaborator Contribution | Arellano is contributing with his expertise in modeling income processes. |
| Impact | So far the work has been presented but paper is not yet completed. |
| Start Year | 2012 |
| Description | Subjective expectations and income processes of micro finance clients in India |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Other academic audiences (collaborators, peers etc.) |
| Results and Impact | Presentation given at the Workshop on "Microfinance's Contribution to Development Studies. What Interdisciplinary Approaches Add to Microfinance Understanding?" More or less the same presentation was given at the Economics Seminar Series of the Hariot Watt University, Edinburgh on the 5th of March 2010 (http://www.sml.hw.ac.uk/research/economics/index.html) Presentation given at the Workshop on "Microfinance's Contribution to Development Studies. What Interdisciplinary Approaches Add to Microfinance Understanding?" |
| Year(s) Of Engagement Activity | 2010 |
| Description | This grant led to a collaboration between Orazio Attanasio, Manuel Arrelano, Britta Augsburg and Sam Crossman on a new academic paper. This was among other presented at a "Workshop on Subjective Expectations", organised by MiSoC. |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | Local |
| Primary Audience | Other audiences |
| Results and Impact | This grant led to a collaboration between Orazio Attanasio, Manuel Arrelano, Britta Augsburg and Sam Crossman on a new academic paper. This was among other presented at a "Workshop on Subjective Expectations", organised by MiSoC. |
| Year(s) Of Engagement Activity | 2020 |