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Journal Article

Probabilistic expectations in developing countries

Authors

Publication date

Aug 2014

Summary

Many decisions are made under uncertainty, and individuals are likely to form subjective expectations about the probabilities of events that are relevant to their decisions. I review here a recent and growing literature that uses probabilistic expectations elicited from survey respondents in developing countries. I first present an illustrative model of one particular decision under uncertainty—the choice of a college—to exemplify the importance of subjective expectations data for identification purposes. I then review existing evidence emphasizing that it is feasible to elicit probabilities from survey respondents in low-literacy settings and describe common patterns of answers. Finally, I describe existing applications, many of which seek to assess how expectations influence behavior, in various domains, including health, education, agricultural production, and migration.

Published in

Annual Review of Economics

Volume and page numbers

6 , 1 -20

DOI

http://dx.doi.org/10.1146/annurev-economics-072413-105148

ISSN

16

Subjects

Psychology and Economics

Notes

Not held in Research Library - bibliographic reference only

#522259


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