Wealth and Time Preference in Rural Ethiopia

EfD Discussion Paper
1 January 2008

This study measured the discount rates of 262 farm households in the Ethiopian highlands, using a time preference experiment with real payoffs. In general, the median discount rate was very high and varied systematically with wealth and risk aversion. Our findings, however, warn that rates-of-time preferences (RTPs) and risk aversion reinforce each other and are easily confused. Because the RTPs were so high, what seem like profitable investments from the outside might not seem so from the farmers’ perspectives.

 

Topics

Files and links

Country

Request a publication

Due to Copyright we cannot publish this article but you are very welcome to request a copy from the author. Please just fill in the information beneath.

Authors I want to contact
Publication | 5 June 2008