Bayesian Herders: Asymmetric Updating of Rainfall Beliefs in Response to External Forecasts

Abstract

It is the Policy of Cornell University actively to support equality of educational and employment opportunity. No person shall be denied admission to any educational program or activity or be denied employment on the basis of any legally prohibited discrimination involving, but not limited to, such factors as race, color, creed, religion, national or ethnic origin, sex, age or handicap.The University is committed to the maintenance of affirmative action programs which will assure the continuation of such equality of opportunity. Temporal climate risk weighs heavily on many of the world's poor. Recent advances in model-based climate forecasting have expanded the range, timeliness and accuracy of forecasts available to decision-makers whose welfare depends on stochastic climate outcomes. There has consequently been considerable recent investment in improved climate forecasting for the developing world. Yet, in cultures that have long used indigenous climate forecasting methods, forecasts generated and disseminated by outsiders using unfamiliar methods may not readily gain the acceptance necessary to induce behavioral change. The value of model-based climate forecasts depends critically on the premise that forecast recipients actually use external forecast information to update their rainfall expectations. We test this premise using unique survey data from pastoralists and agropastoralists in southern Ethiopia and northern Kenya, specifying and estimating a model of herders updating seasonal rainfall beliefs. We find that those who receive and believe model-based seasonal climate forecasts indeed update their priors in the direction of the forecast received, assimilating optimistic forecasts more readily than pessimistic forecasts.

Measuring subjective expectations in developing countries: A critical review and new evidence

“…An example of this method is given in Luseno et al (2003) and Lybbert et al (2007), who ask pastoralists with little formal education in Ethiopia and Kenya to allocate 12 stones across three different piles on the ground, one for "above normal," one for "normal," and one for "below normal," with the number of stones in each pile representing the individual's prediction about the likelihood that rainfall in the coming long rains season would be in each of the given states. They found only 16 of the 244 households gave degenerate forecasts in which all 12 stones were placed in a single pile.…”

“…One hundred stones would be likely to tax the patience of a respondent. An exception is Luseno et al (2003) and Lybbert et al (2007) who use 12 stones, with three states of nature. The advantage of 12 stones in their setting is that it allows respondents to answer with a uniform distribution, which would not be possible with 10 stones.…”

Subjective expectations in the context of HIV/AIDS in Malawi

“…Prior to the study presented in this paper, there have been very few attempts to elicit probabilistic expectations in developing countries (for an overview, see Delavande, Gine, and McKenzie 2009). Some of the exceptions include the following: Luseno et al (2003) and Lybbert et al (2007), who have elicited rainfall expectations by asking household heads in Kenya and Ethiopia to allocate twelve stones into three piles, with each pile representing a different state of nature regarding the precipitation level for the coming rainy season (above normal, normal and below normal); Santos and Barrett (2006) and Hill (2006), who have used a similar technique to elicit expectations about herd size and coffee prices, respectively; McKenzie, Gibson, and Stillman (2006), who have used the percent chance wording to elicit expectations about future post-migration employment and income from Tongans intending to emigrate to New Zealand; and Delavande (2004) and Attanasio, Meghir, and Vera-Hernánde (2005), who have used a visual scale labeled from zero to ten (or hundred) to elicit probabilistic expectations about contraceptive failures and birth outcomes in Ghana or future income in Colombia. In most of the existing cases, however, these methods to elicit probabilistic expectations were implemented in populations that have a relatively high level of literacy or numeracy compared to the sub-Saharan African countries where HIV/AIDS is most prevalent, or were limited to small-scale surveys without extensive socioeconomic or demographic information.…”

Subjective Expectations and Income Processes in Rural India

“…() and Lybbert et al . () on pastoralists’ rainfall expectations in East Africa and McKenzie et al . () on income expectations of Tongans if they were to migrate to New Zealand.…”

“…More recently, Delavande et al (2011) provide an overview of the recent contributions to this strand of literature and conclude, in line with Attanasio (2009), that eliciting subjective expectation data in developing countries is 'feasible and valuable'. Studies that have used subjective expectation data in a development setting are Attanasio et al (2005) on the use of probability distributions of future income in Colombia, Luseno et al (2003) and Lybbert et al (2007) on pastoralists' rainfall expectations in East Africa and McKenzie et al (2013) on income expectations of Tongans if they were to migrate to New Zealand.…”