Field experiments in economics: preferences regarding risk and demand by intertemporal contracts in Peru

Abstract

This article looks at the determinants of the choice of productive projects involving intertemporal contracts in rural Peru. In a setting where the formal education is limited, the successful launching of new financial instruments may be affected by the lack of proper understanding of their main features,  as well as judgment biases. We find that education, a source of judgement bias, and (weakly) risk aversion, affect such a project choice. In contrast, wealth does not appear to play a role in explaining project choice.