Envy and Agricultural Innovation: An Experimental Case Study from Ethiopia

The underlying motivations for envy or related social preferences and their impact on agricultural innovations are examined by combining data from money burning experimental game and household survey from Ethiopia. In the first stage of the money burning experimental game, income inequality is induced by providing different endowments and playing a lottery. In the second, people are allowed to decrease (‘burn’) other players’ money at their own expense. Conditional on individual behaviour, experimentally measured envious preferences from others have a negative effect on real life agricultural innovation.