Parental risk aversion and educational investment: panel evidence from rural Uganda
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In this paper we combine a unique large scale field experimental data on preferences and longitudinal household survey data from rural Uganda to estimate the impact of parental risk aversion, time preferences and loss aversion on educational investment. Our results show that parental risk aversion is increasing in wealth. On a whole, we find that risk aversion is positively correlated with educational investment measured in per school age child educational expenditure. Further analysis revealed that parental risk aversion is negatively associated with educational investment for poorer households. Pathway analysis suggests that risk averse households are less credit constrained. The hypothesis that parental risk aversion depresses educational investment may only be tenable for poor households’ in rural Uganda.
KeywordsRisk attitude Time preference Experiment Education Sub-Saharan Africa
JEL ClassificationJ62 J38
I hereby declare that this work did not benefit from any funding except the personal funds of the researcher. I will like to thank the National Graduate Institute for Policy Studies for granting me access to the data used in this study.
Compliance with ethical standards
Conflict of interest
The authors declare that they have no conflict of interest.
All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki declaration and its later amendments or comparable ethical standards.
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