Till Ludwig is a Research Fellow at the Center for Development Research (ZEF) in Bonn, Germany. He presented his research, ““The Effect of Individual Preferences on Food and Nutrition Security: Evidence of How Risk Preference and Altruism Affect Food Consumption Choices”. The seminar was held on Tuesday, April 23, 2019 at 12:30 p.m. in Mann 102 at Cornell University’s main campus in Ithaca, NY.
About the Speaker:
Till Ludwig is a Research Fellow at the Center for Development Research (ZEF) and PhD Candidate in Agricultural and Development Economics at the University of Bonn, Germany. He studies agricultural economics, nutrition economics and their interlinkages regarding food consumption. Utilizing household data and microeconomics, he primarily works with quantitative methods. His research focuses on smallholder farmers in risk-prone areas of India and Bangladesh.
The economic literature presents risk preference and altruism as core factors that affect individual decision making (Kahneman, Knetsch, & Thaler, 1990; McCrae & Costa, 1987; Thaler & Sunstein, 2008). Since nutrition affects the health and productivity of individuals, food consumption choices can be considered to be individual investment decisions that enable future income generation (Deaton, 1992; Grossman, 1972; Levhari & Weiss, 1974; Rieger, 2015). We utilize this link to assess the effects that individual risk preference and altruism of peers have on food and nutrition security.
We use a household-level survey that is carried out in rural areas of India, in regions with severe malnutrition rates and high poverty rates. 1177 households are interviewed with at least one child below 2 years of age. A stratified randomized sampling is used, looking at 111 villages. Food and nutrition security indicators (e.g. FIES, MDDW, MAD, anthropometric measurements) form a comprehensive understanding of malnutrition rates. Hypothetical games, a mix of qualitative and quantitative questions for preference assessment are used for eliciting risk preference, time preference and altruism of the household head and the spouse (Falk et al., 2015, 2018; Falk, Becker, Dohmen, Huffman, & Sunde, 2016). A village-level recall questionnaire is utilized in focus group discussions. The cross sectional study is analyzed using various econometric regressions specifications.
A positive association of risk preference on dietary intake is estimated. An increase of 10 percentage points in risk taking increases the dietary diversity score by 0.9% to 1.4%. The effects are confirmed for other indicators of food and nutrition security and are found to be statistically robust. Altruistic behavior of the household head improves the dietary diversity score by 1.1% to 3.0%. The results are robust over various tests and significant effects can be replicated for other indicators of individual and household nutrition. We show that generally unobserved preferences can contribute to understanding heterogeneous malnutrition rates in nutrition insecure and risky environments.
This study contributes to the existing literature by analyzing the effects of core character traits of behavioral economics on individual nutrition. We show that under uncertainty, individual nutrition decisions differ depending on varying economic preferences. Furthermore, the results indicate that a large-scale assessment of individual preferences is possible, hence, can support development activities such as targeting of households at risk.