Risk and Development
The research program of the WZB Junior Research Group Risk & Development is focused on problem oriented basic research of decision making under risk and uncertainty. Current projects of the unit include theory based field experiments around the world, e.g. cultural comparisons of risk and uncertainty attitudes and the investigation of the incentives to take up crop insurance by farmers in Southeast Asia and India.
The Junior Research Group conducts research in development economics through the application of principles derived from decision theory and experimental economics. This encompasses aspects of macroeconomics, e.g. the average risk attitude of a country and its influence on the growth potential, as well as microeconomics, e.g. whether the low level of insurance purchases can be explained by individual risk attitude.
Initially, multiple projects are being started which analyze incentive mechanisms that are to be implemented in the field as concrete measures with a relevance to development policies. These evolve around the question how poor farmers in developing countries can be protected from income shocks and whether these protective measures can lead them out of poverty. While considering individual preferences, incentives will be introduced in order to promote a sustainable savings behavior.
This research will contribute to basic research as well as to the set up of more effective policy instruments.