Aspirations failure and formation in rural Nepal

Sarah A. Janzen, Nicholas P. Magnan, Sudhindra Sharma, William M. Thompson

Research output: Contribution to journalArticlepeer-review

Abstract

Aspirations, or a lack thereof, have recently gained the attention of economists as a behavioral constraint to future-oriented behavior and investment. In this paper we empirically test the theories of aspirations failure and formation articulated in Appadurai (2004), Ray (2006), and Genicot and Ray (2015) using a unique dataset from rural Nepal. We ask two questions: (1) What is the relationship between aspirations and future-oriented behavior? and (2) To what extent are an individual's aspirations associated with the observable characteristics of those around her? We find that aspirations correspond with future-oriented economic behavior as predicted by theory: investment in the future increases with aspirations up to a certain point, but if the gap between one's current status and aspirations becomes too large, investment subsequently declines. We also find that one's aspirations are associated with outcomes of those in her social network of higher, but not lower, status. Together these findings provide empirical evidence that aspirations, which may be a social phenomenon, can either stimulate development or reinforce poverty.

Original languageEnglish (US)
Pages (from-to)1-25
Number of pages25
JournalJournal of Economic Behavior and Organization
Volume139
DOIs
StatePublished - Jul 1 2017
Externally publishedYes

Keywords

  • Aspirations
  • Aspirations failure
  • Poverty
  • Social networks

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

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