Last updated on February 14, 2016
My coauthor and doctoral student Yu Na Lee and I have finally revised (and, perhaps more importantly, resubmitted) our paper titled “Attitudes to Price Risk and Uncertainty: The Earnest Search for Identification and Policy Relevance.” Here is the abstract:
After several decades of neglect, the food crises of 2007-2008 and 2010-2011 have brought food price volatility back on the policy agenda. The study of price volatility, however, is really the study of price risk and uncertainty as they relate to individuals, households, and firms. Because the study of behavior in the face of risk and uncertainty has mostly focused on behavior in the face of income risk and uncertainty, we first review the theoretical and empirical literatures on behavior in the face of price risk and uncertainty. Then, because policy recommendations are only as good as the empirical findings on which they are based, and because market-level phenomena such as price risk do not lend themselves well to randomization, we discuss the ways in which experimental economics can inform our understanding of price risk. Finally, because expected utility—the workhorse model used to study behavior in the face of risk and uncertainty—fails to account for a number of behaviors, we discuss how insights from behavioral economics could be incorporated into the study of price risk, with the ultimate goal of generating more policy-relevant findings.
If you are a doctoral student or a young researcher interested in behavioral and/or experimental methods as well as behavior in the face of risk and uncertainty, our paper provides a number of potentially interesting research questions.