Aspirations, inequality, and behavioral change: evidence from Colombia
DOI
https://doi.org/10.1080/21665095.2022.2025878
Document Type
Article
Publication Date
1-1-2022
Publication Title
Development Studies Research
Abstract
In this article, I analyze why inequality can discourage investment. I derive my hypothesis from the theory of aspirations as a reference point. A more significant aspiration gap–the distance between the current state and the aspired state–leads to frustration and fewer incentives to invest. In study I, I use data from a longitudinal panel, exploiting environmental shocks to identify a plausibly exogenous source of variation for inequality. I combine it with an indirect measurement of aspirations using data on wealth, computed for the plausible reference group, defined as cells within the population, sharing similar observable characteristics. Finally, I use the variation in the total debt as the outcome variable. In study II, I use data from a specialized survey where shocks and aspirations are directly measured. I look at total debt as the outcome. Although the two tests are only partially conclusive, the evidence aligns with the central hypothesis.
Volume
9
Issue
1
First Page
12
Last Page
20
Recommended Citation
Edison Rojas Mora, Jaime, "Aspirations, inequality, and behavioral change: evidence from Colombia" (2022). Scopus Unisalle. 799.
https://ciencia.lasalle.edu.co/scopus_unisalle/799
Identifier
85123688860 (Scopus)