Risk Preferences and the Poverty Trap: A Look at Farm Technology Uptake amongst Smallholder Farmers in the Matzikama Municipality
This study looks at the determinants of farm technology uptake, with attention to farmers’ risk preference and income. We use a field experiment to elicit measures of risk aversion, loss aversion, and non-linear weights of probability. We then relate these measures to the uptake of drought-resistant and improved seeds. In light of the poverty trap theory, we also consider the role that income plays in risk preference. Our findings suggest that farm risk management policies need to take into account the role of risk and loss preferences in uptake decisions.