We use a series of field experiments in rural Burundi to examine the impact of exposure to conflict on social, risk, and time preferences. We find that conflict affects behavior: individuals exposed to violence display more altruistic behavior towards their neighbors, are more risk-seeking, and have higher discount rates. Large adverse shocks can thus alter savings and investments decisions, and potentially have long-run consequences—even if the shocks themselves are temporary. (JEL C93, D12, D74, 012, 017, 018)
Abstract
We introduce the Visual Convex Time Preferences (VCTP) task, a new tool for measuring time preferences that synthesizes the simplicity of Multiple Price List (MPL) and the precision of Convex Time Budget (CTB) tasks. We evaluate VCTP in three environments: lab, field and high school. The lab experiment suggests that VCTP improves the precision of time preferences without increasing task time or decreasing subject consistency. The field experiment partially replicates the results, since subjects make little use of the additional precision. The high school experiment shows that younger populations find it difficult to perform both the MPL and the VCTP, but older teenagers use the advantage of VCTP at no cost. Overall, the results indicate that the task successfully measures time preferences but should be adapted to specific populations.
Abstract
The relationship between firms’ owners and managers is a quintessential example of costly principal–agent interaction. Optimal design of monetary incentives and supervision mechanisms are the two traditional ways of reducing agency costs in this relationship. In this paper, we show evidence which is consistent with a third mechanism: firms have managers whose economic preferences are aligned with owners' interests. We uncover differences in economic preferences between managers employed in firms controlled by two distinct classes of ‘patrons’: employee-owned firms (worker cooperatives) and conventional investor-owned firms. In a high-stakes lab-in-the-field experiment, we find that co-op managers are less risk-loving and more altruistic than their conventional counterparts. We do not observe differences between the two groups in terms of time preferences, reciprocity, and trust. Our findings are consistent with existing evidence on worker cooperatives, such as their tendency to self-select into less risky industries and their compressed compensation structures.
Abstract
In ethnically diverse societies, are citizens treated equally by their political representatives? Several field experiments find that politicians discriminate in their daily communication with voters. However, these studies only focus on the USA and South Africa and may overestimate the degree of discrimination by ignoring sex and socio-economic status. We address these shortcomings by investigating ethnic discrimination in Sweden. In an email experiment, all 812 municipal commissioners were randomly contacted by voters with Arabic- or Swedish-sounding names. Our results do not show any clear signs of discrimination; thus, previous results might not be generalisable to Sweden or similar democracies.
The gender-gap reversal in education could have far-reaching consequences for marriage and family lives. Using data from the National Longitudinal Survey of Youth 1979 and longitudinal multilevel dyad models, this study investigated how educational assortative mating shaped income dynamics in couples over the marital life course. Based on educational assortative mating, couples were grouped into three categories—educational hypergamy (wives less educated than their husbands), homogamy, and hypogamy (wives more educated than their husbands). Results showed that change in husbands’ income with marital duration was similar across couples, whereas change in wives’ income varied by educational assortative mating such that wives in educational hypogamy exhibited more positive change in income over the marital life course. The findings underscored the asymmetric nature of spousal influence and gender change in heterosexual marriages.
Violent Conflict and Behavior: A Field Experiment in Burundi
