Aspiration Adaptation in Resource-Constrained Environments

• DOI: 10.2139/ssrn.3103190
• Publication Date: 2018-04-20T15:42:35Z
• Authors: Sebastian Galiani; Paul J. Gertler; Raimundo Undurraga
• Keywords: 0502 economics and business; 05 social sciences; 11. Sustainability; 1. No poverty

We use a multi-country field experiment to test the effect of slum-housing intervention on housing aspirations non-beneficiary neighbors. Initially after treatment, nontreated households’ upgrade their dwelling are significantly higher compared treatment group, suggesting that they aspire “keep-up” with Joneses’. No effects found, however, investments. Eight months later, aspirational disappears. Estimates based structural model aspiration adaptation show decay rate is 38% per month. Our evidence suggests simply fostering may be insufficient encourage forward-looking behavior among poor.