Are non-fungible payments attractive when they reduce risk exposure? Evidence from Colombia.

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 χ2 tests for all four decisions fall below 0.035). Our between-

SUBMITTER: Cano A 

PROVIDER: S-EPMC10760666 | biostudies-literature | 2024

REPOSITORIES: biostudies-literature