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Risk preferences

2016-02-18

The role of beliefs, trust, and risk in contributions to a public good

Abstract: This paper experimentally investigates if and how beliefs, trust, and risk attitudes are associated with cooperative behavior. By applying incentivized elicitation methods to measure these concepts, we find that beliefs about others' cooperation and trust are positively correlated with cooperation in a public goods game. However, even though contributing to a public good resembles a situation of making decisions under strategic uncertainty, elicited risk preferences do not seem to explain cooperation in a systematic way.

2012-06-01

Measuring risk aversion among the urban poor in Kolkata, India

We examine risk preferences in an urban setting in a low-income developing country with nonstudent subjects by adapting the experimental approach of Holt and Laury (HL; 2002). We conducted 22 group experiments with 404 participants and used in-kind payoffs. The average respondent was ‘riskaverse’ (the midpoint of Constant Relative Risk Aversion (CRRA) intervals among participants was 0.53, roughly in line with most similar studies in poor countries).

2012-03-11

Evaluating An Analytic-deliberative Risk-ranking Process in A Chinese Context

In previous research, a deliberative process for integrating stakeholder perspectives in the ranking of risks was introduced and empirically tested with lay groups composed predominantly of Americans. In this paper, we explore the viability of this process with lay groups of Chinese, because previous research has shown that Americans and Chinese differ substantially along many dimensions of cognition and social organization relevant to decision-making.

2011-10-25

Tenure security, resource poverty, public programs, and household plot-level conservation investments in the highlands of northern Ethiopia

Land degradation poses a serious problem for the livelihoods of rural producers. Furthermore, there is rarely enough private investment taking place to commensurate the scale of the problem. This article examines the role of tenure insecurity, resource poverty, risk and time preferences, and community-led land conservation on differentiated patterns of household investment in land conservation in northern Ethiopia.

2011-10-24

The Effect of Ambiguous Risk and Coordination on Farmer´s Adaptation to Climate Change-A Framed Field Experiment

The risk of losses of income and productive means due to adverse weather can differ significantly among farmers sharing a productive landscape, and is of course hard to estimate, or even “guesstimate” empirically. Moreover, the costs associated with investments in reduced vulnerability to climatic events are likely to exhibit economies of scope. We explore the implications of these characteristics on farmer's decisions to adapt to climate change using a framed field experiment applied to coffee farmers in Costa Rica. As expected, we find high levels of risk aversion, but even using that as a baseline, we further find that farmers behave even more cautiously when the setting is characterized by unknown or ambiguous risk (i.e. poor or non-reliable risk information). Secondly, we find that farmers, to a large extent, coordinated their decisions to secure a lower adaptation cost, and that communication among farmers strongly facilitated coordination.

2011-05-23

Agricultural Investment and Productivity - Building Sustainability in East Africa

Agricultural Investment and Productivity provides a deep and systematic look at the opportunities for and constraints to investments in sustainable agriculture in East Africa, offering important insights into what works and how to analyze agricultural investments in one of the poorest regions of the world. The book critically examines the reasons behind East Africa's stagnant agricultural productivity over the past forty-five years, using the primary lens of investments in fertilizers, seeds, and sustainable land management technologies, These investments have a tremendous impact on production volume, ultimately affecting the income of millions of families throughout the region.

2011-01-31

Risk Ranking

In previous research, a deliberative process for integrating stakeholder perspectives in the ranking of risks was introduced and empirically tested with lay groups composed predominantly of Americans.

2010-08-19

A choice experiment on coca cropping

From 1997 to 2005, an astonishing 5200 million USD was invested to reduce cocaine production in Colombia, the world's main cocaine producer. However, little is known about the effectiveness of policies targeting coca cultivation. This paper uses a survey-based experiment to evaluate the effects of the two main policies: eradication and alternative development programs.

2009-09-21

The Effect of Risk, Ambiguity, and Coordination on Farmers´Adaptation to Climate Change: A Framed Field Experiment

The authors used a framed field experiment with coffee farmers in Costa Rica after tropical storm Alma to explore how farmers react to different levels of risk to income and productive means from extreme weather under measurable and unmeasurable uncertainty. They also examined whether investment costs to reduce vulnerability exhibit economies of scope.

2008-08-15

Trade, GMOs, and Environmental Risk: Are Policies Likely to Improve Welfare?

Controversy over the EU import ban on food from genetically modified organisms (GMOs) forced the EU to change course and institute a mandatory labeling scheme. This study first examined how different policies for the production and use of GMOs might influence the market outcome in consumer food markets. Second, it evaluated the welfare effects of the policy measures, finding that mandatory labeling often increases both domestic welfare and global welfare, while trade bans more likely decrease global welfare.

2008-04-08

Market Imperfections and Farm Technology Adoption Decisions: A Case Study from the Highlands of Ethiopia

This examination of the impacts of market and institutional imperfections on technology adoption found that Ethiopian farmers’ decisions to adopt fertilizer significantly and negatively depended on whether they also adopted soil conservation, but not vice versa. Market imperfections were significant factors in explaining variations in decisions to adopt farm technology, such that relieving market imperfections could increase adoption of farm technologies.

2007-01-01

Small-scale Fishermen and Risk Preferences

Using an experimental approach, we investigate the risk preferences of artisanal fishermen in Tanzania waters of Lake Victoria. The experiment concerns pairwise comparisons of hypothetical fishing trips that vary in expected mean and spread of the net revenue.

2001-05-02

Trade, GMOs, and Environmental Risk: Are Policies Likely to Improve Welfare?

Food with inputs from genetically modified organisms (GMOs) has met considerable skepticism among European Union (EU) consumers. The EU import ban on GM food has triggered a great deal of controversy and has been partly replaced by a mandatory labeling scheme. Although there is no measure in the General Agreement on Tariffs and Trade that directly addresses the use of product labeling, WTO and others have been skeptical to mandatory product labeling on the grounds that they may be used as hidden protectionism hampering global welfare. This study has two foci. First, we examine how different policies for the production and use of GMOs might influence the market outcome in consumer food markets. Second, we evaluate the welfare effects of the policy measures. We find that mandatory labeling often increases domestic welfare and, may also enhance global welfare. On the other hand, a trade ban is more likely to decrease global welfare.