Essays in behavioural development economics
2017-02-16T04:49:45Z (GMT) by
My thesis comprises of three papers in behavioural development economics. In all three of my papers I use economic theories and artefactual field experiments to understand individuals’ preferences for trust, altruism and honesty when they interact with others in their societies. The first paper analyses the effect of multiple identities on interpersonal trust. We conduct a field experiment in West Bengal, India and Bangladesh, two regions significantly different in religious composition, but similar on most socio-economic characteristics, ethnicity and language. In West Bengal, Hindus (Muslims) form the majority (minority), while in Bangladesh Hindus (Muslims) form the minority (majority). Using this variation, we analyse whether identity based on religion or the relative status it generates within the population drives trust behaviour. Our results suggest that it is identity based on status and not religion that drives behaviour. We find that in both locations individuals with minority status, irrespective of religion, exhibit positive in-group bias in trust, while individuals with majority status, again irrespective of religion, show positive out-group bias in trustworthiness. In addition, we report differences in the behaviour of religious and non-religious individuals which can explain our main results. In the second paper, we experimentally study the effect of framing and size of windfall gains on the redistribution of such gains. We invite randomly selected individuals from villages in Bangladesh to take part in dictator experiments where they received endowments worth up to several months of salary and asked to redistribute this endowment between themselves and other individuals. We manipulated whether dictators could give to or take from another individual (i.e. whether the endowment was allocated to the dictator or other individual) and whether the endowment was moderate or very large. We find that dictators allocate almost nine times more to other individuals under the take than give frame when stakes are very large, even after they could reconsider their choices. In addition, we find that proportions allocated to other individuals dramatically drop when stakes increase under the give but not the take frame. The results provide novel evidence on the role of framing and stakes for pro-sociality. In the third paper we experimentally study honesty over large stakes using randomly selected individuals from a set of villages in Bangladesh. Participants took part in a Sender-Receiver cheap talk experiment where the potential costs of honesty varied from a few hours to a few months average income. We find that majority of the Senders are honest. However, Receivers only follow Sender messages in fifty percent cases suggesting honest behaviour does not translate to perceptions of it. We find that stakes affect honesty significantly. Honesty decreases by a third over larger stakes. We also report that women are more honest than men.
Awards: Vice-Chancellor’s Commendation for Doctoral Thesis Excellence in 2014.