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Examining the relationship between farmers' perceived trust and investment preferences

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  • Omotuyole Isiaka Ambali
  • Toritseju Begho

Abstract

This paper investigates whether trust influences investment decisions. We analyse the 2015/2016 Nigeria General Household Survey data from 4582 households. We find that trust, risk and time preferences are important determinants of investment choice. A high trust decreases the chance of investing in low risk and low‐profit businesses. That is, more trusting individuals prefer riskier high return investments. In contrast, impatience and risk avoidance increase the chances of investing in low‐risk, low‐return businesses. This paper will be useful in planning an investment instrument that is both suitable for specific individuals and aligns with the expectations of financial institutions and government.

Suggested Citation

  • Omotuyole Isiaka Ambali & Toritseju Begho, 2021. "Examining the relationship between farmers' perceived trust and investment preferences," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(8), pages 1290-1303, November.
    • Handle: RePEc:wly:jintdv:v:33:y:2021:i:8:p:1290-1303
    DOI: 10.1002/jid.3576
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    1. Xiuling Ding & Qian Lu & Lipeng Li & Apurbo Sarkar & Hua Li, 2022. "Evaluating the Impact of Institutional Performance and Government Trust on Farmers’ Subjective Well-Being: A Case of Urban–Rural Welfare Gap Perception and Family Economic Status in Shaanxi, Sichuan a," IJERPH, MDPI, vol. 20(1), pages 1-20, December.

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