Risk Preferences and the Decision to Flee Conflict

Despite the growing numbers of forcibly displaced persons worldwide, many people living under conflict choose not to flee. Individuals face two lotteries -- staying or leaving -- characterized by two distributions of potential outcomes. This paper...

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Main Authors:	Ceriani, Lidia, Verme, Paolo
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2018
Subjects:	CONFLICT MIGRATION EXPECTED UTILITY FORCED DISPLACEMENT RISK TOLERANCE RISK AVERSION RISK MANAGEMENT
Online Access:	http://documents.worldbank.org/curated/en/111191522076481536/Risk-preferences-and-the-decision-to-flee-conflict http://hdl.handle.net/10986/29556

id	okr-10986-29556
recordtype	oai_dc
spelling	okr-10986-295562021-06-08T14:42:45Z Risk Preferences and the Decision to Flee Conflict Ceriani, Lidia Verme, Paolo CONFLICT MIGRATION EXPECTED UTILITY FORCED DISPLACEMENT RISK TOLERANCE RISK AVERSION RISK MANAGEMENT Despite the growing numbers of forcibly displaced persons worldwide, many people living under conflict choose not to flee. Individuals face two lotteries -- staying or leaving -- characterized by two distributions of potential outcomes. This paper proposes to model the choice between these two lotteries using quantile maximization as opposed to expected utility theory. The paper posits that risk-averse individuals aim at minimizing losses by choosing the lottery with the best outcome at the lower end of the distribution, whereas risk-tolerant individuals aim at maximizing gains by choosing the lottery with the best outcome at the higher end of the distribution. Using a rich set of household and conflict panel data from Nigeria, the paper finds that risk-tolerant individuals have a significant preference for staying and risk-averse individuals have a significant preference for fleeing, in line with the predictions of the quantile maximization model. These findings are contrary to findings on economic migrants, and call for separate policies toward economic and forced migrants. 2018-03-30T17:20:20Z 2018-03-30T17:20:20Z 2018-03 Working Paper http://documents.worldbank.org/curated/en/111191522076481536/Risk-preferences-and-the-decision-to-flee-conflict http://hdl.handle.net/10986/29556 English Policy Research Working Paper;No. 8376 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Nigeria
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	CONFLICT MIGRATION EXPECTED UTILITY FORCED DISPLACEMENT RISK TOLERANCE RISK AVERSION RISK MANAGEMENT
spellingShingle	CONFLICT MIGRATION EXPECTED UTILITY FORCED DISPLACEMENT RISK TOLERANCE RISK AVERSION RISK MANAGEMENT Ceriani, Lidia Verme, Paolo Risk Preferences and the Decision to Flee Conflict
geographic_facet	Africa Nigeria
relation	Policy Research Working Paper;No. 8376
description	Despite the growing numbers of forcibly displaced persons worldwide, many people living under conflict choose not to flee. Individuals face two lotteries -- staying or leaving -- characterized by two distributions of potential outcomes. This paper proposes to model the choice between these two lotteries using quantile maximization as opposed to expected utility theory. The paper posits that risk-averse individuals aim at minimizing losses by choosing the lottery with the best outcome at the lower end of the distribution, whereas risk-tolerant individuals aim at maximizing gains by choosing the lottery with the best outcome at the higher end of the distribution. Using a rich set of household and conflict panel data from Nigeria, the paper finds that risk-tolerant individuals have a significant preference for staying and risk-averse individuals have a significant preference for fleeing, in line with the predictions of the quantile maximization model. These findings are contrary to findings on economic migrants, and call for separate policies toward economic and forced migrants.
format	Working Paper
author	Ceriani, Lidia Verme, Paolo
author_facet	Ceriani, Lidia Verme, Paolo
author_sort	Ceriani, Lidia
title	Risk Preferences and the Decision to Flee Conflict
title_short	Risk Preferences and the Decision to Flee Conflict
title_full	Risk Preferences and the Decision to Flee Conflict
title_fullStr	Risk Preferences and the Decision to Flee Conflict
title_full_unstemmed	Risk Preferences and the Decision to Flee Conflict
title_sort	risk preferences and the decision to flee conflict
publisher	World Bank, Washington, DC
publishDate	2018
url	http://documents.worldbank.org/curated/en/111191522076481536/Risk-preferences-and-the-decision-to-flee-conflict http://hdl.handle.net/10986/29556
_version_	1764469708632883200

Risk Preferences and the Decision to Flee Conflict

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