Working paper number:07-06
Paper Abstract:In this paper we present a newly-developed interactive elicitation methodology to collect probabilistic expectations in a developing country context with low levels of literacy and numeracy, and we evaluate the feasibility and success of this method for a wide range of outcomes in rural Malawi. We find that respondent’s answers about subjective expectations respect basic properties of probabilities, and vary meaningfully with observable characteristics and past experience. From a substantive point of view, the elicited expectations indicate that individuals are generally aware of differential risks. For example, individuals with less income and less land feel rightly at more risk of financial distress than people with higher SES, or people who are divorced or widow feel rightly at more risk of being infected with HIV than currently married individuals. While many expectations—including also the probability of being currently infected with HIV—are well-calibrated compared to actual probabilities, mortality expectations are substantially over-estimated compared to lifetable estimates. This overestimation may lead individuals to underestimate the benefits of adopting HIV risk-reduction strategies. The skewed distribution of expectations about condom use also suggests that a small group of innovators are the forerunners in the adoption of condoms within marriage for HIV prevention.
Delavande, Adelin and Hans-Peter Kohler. 2007. "Subjective Expectations in the Context of HIV/AIDS in Malawi." PARC Working Paper Series, WPS 07-06.