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Are non-fungible payments attractive when they reduce risk exposure? Evidence from Colombia.
- Source :
- PLoS ONE; 1/2/2024, Vol. 19 Issue 1, p1-21, 21p
- Publication Year :
- 2024
-
Abstract
- We conducted a lab-in-the-field experiment in which 214 Colombian rural workers must choose between cash or voucher payment for completing a real effort task. Although the voucher may be perceived as non-fungible, it halves the probability of suffering a negative shock that will reduce the participant's payment by two-thirds. Participants made four decisions in which we vary the voucher values such that this payment method offers, in expectation, between 88% to 123% of the cash payment (fixed across decisions). We find that uptake rates go from 32% to 56%, from the least to the most generous voucher. These rates are consistently larger compared to a reference sample of undergrad students from the same region (p–values from the χ<superscript>2</superscript> tests for all four decisions fall below 0.035). Our between-subjects variations reveal that presenting the vouchers in descending order yields a higher uptake than the ascending order (p < 0.001 for the corresponding coefficient in a tobit and ordered logit regressions including municipality characteristics, an effect driven by the two decisions with the lowest voucher values, with p–values of 0.008 and 0.072 in the χ<superscript>2</superscript> tests, respectively). We interpret this result as an endowment effect of the voucher's risk reduction. [ABSTRACT FROM AUTHOR]
- Subjects :
- RISK exposure
PAYMENT
T-test (Statistics)
Subjects
Details
- Language :
- English
- ISSN :
- 19326203
- Volume :
- 19
- Issue :
- 1
- Database :
- Complementary Index
- Journal :
- PLoS ONE
- Publication Type :
- Academic Journal
- Accession number :
- 174560264
- Full Text :
- https://doi.org/10.1371/journal.pone.0296299