Global Advanced Research Journal of Peace, Gender and Development Studies (GARJPGDS)
November 2012 Vol. 1(2), pp. 033-041
Copyright © 2012 Global Advanced Research Journals

 

Full Length Research

Risk, uncertainty and decision-making. An empirical test of Irving fisher’s theory of interest

Buchenrieder G1* and Balgah RA2

1Martin-Luther-University Halle-Wittenberg, Institute of Agricultural and Nutrition Sciences, D-06099 Halle (Saale); Germany (Associated Scholar of IAMO)
2University of Bamenda, Faculty of Sciences, P.O. Box 39, Bamenda, NW, Cameroon

*Corresponding Author’s Email: Buchenrieder@yahoo.de

Accepted October 9, 2012

Abstract

This paper aims at examining the relevance of Irving Fisher’s theory of interest in explaining agent decision making under conditions of risk and uncertainty created by aggregate natural shocks. A case study approach is applied to empirically test Fisher’s concept of impatience by comparatively analyzing physical and psychic income variables amongst impatient relocated and more patient stationary households, victims of the 1986 lake Nyos natural shock in rural Cameroon. It is demonstrated that significant differences in incomes exist between impatient relocated households, and more patient stationary ones. However, contrary to Fisher’s contention, wealth was generally positively correlated with impatience. The results suggest that Irving Fisher’s theory can be relevant in partially explaining behaviour under conditions of risk and uncertainty. Partiality is attributed by the finding that impatience was rather positively correlated with income, with the exception of income from social capital. There exists a wide gap in current economic and social science literature on the application and test of theories like Fisher’s in understanding and explaining agent decision making, particularly under risky and uncertain conditions resulting from aggregate shocks. The rapid upsurge of natural shocks in recent years requires novel approaches to model agent behavior. This paper highlights the limitations and implications of Fisher’s theory for social policy under shock conditions.

Keywords: Risks, uncertainty, decision-making, Fisher, theory of interest, Cameroon

 

Related Articles


Original Research Articles
Sylvia Manjeri Aarakit and Francis Keneth Kimbugwe
Moderating Effect of Organizational Environment on Intrapreneurial Orientation and Firm Performance
Glo. Adv. Res. J. Peace. Gend. Dev. Stud. July 2015 Vol: 4(7): - [Abstract] [Full Text - PDF] (771 KB)
Tendy M Matenge
Botswana music: Is personal branding the missing factor for growth?
Glo. Adv. Res. J. Peace. Gend. Dev. Stud. July 2013 Vol: 2(3): - [Abstract] [Full Text - PDF] (170 KB)
Review
SO Aghalino
Brief but revolutionary: Yar’ Adua and the sustainable development of the Niger Delta, Nigeria
Glo. Adv. Res. J. Peace. Gend. Dev. Stud. August 2012 Vol: 1(6): - [Abstract] [Full Text - PDF] (196 KB)
Original Research Articles
Igberadja Serumu
Challenges of Implementing Technical and Vocational Education and Training (TVET) Curriculum in Delta State Colleges of Education
Glo. Adv. Res. J. Peace. Gend. Dev. Stud. May 2015 Vol: 4(5): - [Abstract] [Full Text - PDF] (187 KB)
Mohamed SA Mohamed
New protocol for ex vivo lung perfusion prior to transplantation
Glo. Adv. Res. J. Peace. Gend. Dev. Stud. October 2014 Vol: 3(10): - [Abstract] [Full Text - PDF] (125 KB)
Amir Saadaoui and Younes Boujelbene
Liquidity Risk and Volatility in Emerging Bonds Markets
Glo. Adv. Res. J. Peace. Gend. Dev. Stud. August 2016 Vol: 5(8): - [Abstract] [Full Text - PDF] (286 KB)

Current Issue

Viewing Options

View Full Article - PDF
Download Full Article - PDF

Search for Articles

Balgah RA on Google Scholar
Balgah RA on Pubmed
Buchenrieder G on Google Scholar
Buchenrieder G on Pubmed

Statistics

Viewed 931
Printed 246
Downloaded 565
Powered By iPortal Works