B02: Preferences, decision-making behaviour of households and public good provision

In order to understand structural change and the provision of public goods along the rural-urban interface under dynamically changing framework conditions, we propose to analyze social and environmental preferences, individual investment and disinvestment decisions and their associations with public good outcomes. More specifically, the project aims to address four objectives: First, we analyse the factors influencing individual risk, time, social and environmental preferences and their evolution along the rural-urban interface. Second, we investigate investment and disinvestment decisions of households along the rural-urban gradient. In particular, we will test whether the classical investment theory or the real options approach is more appropriate to predict investment and disinvestment decisions. Third, we combine the data to analyse in how far individual investment and disinvestment behaviour can be explained by individual characteristics and preferences as well as changing framework conditions as induced by urbanization. Fourth, we investigate the relationship between socio-economic characteristics and preferences and the provision of environmental public goods.

In order to address the above research objectives, we will collect data from 1,200 households along two rural-urban transects of Bangalore in collaboration with C05. This will constitute the overall sampling framework for other projects within FOR2432, which will work with sub-samples of the households interviewed in this project (B01, B02, B03, A03), or at on-farm research sites chosen from the surveyed households (A01, A02, C01). A standardized questionnaire will be used to collect data on socio-economic household characteristics, social and environmental preferences and life satisfaction. Trust, risk, and time preferences will be elicited using experimental games integrated into the survey. In addition, we will use discrete choice experiments to obtain environmental preferences regarding different ecosystem services identified in collaboration with B01. We will also compile a detailed inventory of public goods provided in each of the neighbourhoods included in the socio-economic household survey. Finally, behavioural experiments will be carried out with a sub-sample of 600 households to investigate investment and disinvestment decisions as well as contributions to a public good.

Indian partner project:
Attitudes and decisions of agricultural households in the rural-urban interface: A survey and comparative analysis

K.C. Lalitha & M.S. Nataraju, University of Agricultural Sciences, Bangalore