Higher order risk attitudes in the time of COVID-19: An experimental study

Mussio, I., Sosa Andrés, M. and Kidwai, A.H. Oxford Economic Papers, 2022, 1–20 https://doi.org/10.1093/oep/gpac007

Abstract: The coronavirus disease (COVID-19) represents a large increase in background risk for individuals. Like the COVID-19 pandemic, extreme events (e.g. financial downturns, natural disasters, and war) have been shown to change attitudes towards risk. Using a risk apportionment approach, we examine whether risk aversion as well as higher order risk attitudes (HORAs) (prudence and temperance) have changed during COVID-19. This methodology allows us to measure model-free HORAs. We include prudence and temperance as higher order measures, as these two have been largely understudied under extreme events but are determinants of decisions related to the health and financial domains. Once we account for socio-demographic characteristics, we find an overall increase in risk aversion during COVID-19. We also find similar results using a hypothetical survey question which measures willingness to take risks. We do not find changes in prudence and temperance using the risk apportionment methodology.

Need, Merit, and Politics in Multilateral Aid Allocation: A District-Level Analysis of World Bank Projects in India

Öhler, H., Nunnenkamp , P. and Sosa Andrés, M. (2017) Review of Development Economics, 21

Abstract: We assess the targeting of foreign aid within recipient countries by employing Poisson estimations on the determinants of the World Bank's allocation of project aid at the district level in India. The evidence of needs-based location choices is very weak as long as the poverty orientation of overall commitments is taken as the yardstick. It is only for some sectors that we find stronger indications of needs-based allocation when combining sector-specific commitments with corresponding measures of need. The evidence for a merit-based allocation of World Bank aid is even weaker. We typically do not find evidence that aid allocation is affected by political patronage at the state or district level. However, the World Bank prefers districts where foreign direct investors may benefit from projects related to infrastructure.

What drives FDI from non-traditional sources? A comparative analysis of the determinants of bilateral FDI flows

Sosa Andrés, M., Nunnenkamp , P. and Busse, M. (2013) Economics: The Open-Access, Open-Assessment E-Journal, 7

Abstract: Non-traditional source countries of FDI play an increasingly important role, notably in developing host countries. This raises the question of whether the location choices differ systematically between traditional and non-traditional source countries. We perform Logit and Poisson Pseudo Maximum Likelihood estimations to assess the determinants of bilateral FDI flows. We find that economic geography variables are more relevant for FDI from nontraditional sources. The risk aversion of non-traditional investors is not consistently weaker than that of traditional investors. Resource abundance and superior technology in the host countries represent minor pull factors of FDI from non-traditional sources.