Simultaneous estimation of risk and time preferences among small-scale cattle farmers in West Africa
AbstractThis study investigates risk and time preferences of small-holder cattle farmers in West Africa. We apply a discounted utility model and jointly estimate a prospect theory-based utility function and a quasi-hyperbolic discounting function using a maximum likelihood method. Results show that West African farmers are less loss-averse and are more patient than suggested by comparable studies in Asian developing countries. The main factors influencing farmers' risk and time preferences are cattle herd size and net revenue from sales of cattle products.
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Bibliographic InfoPaper provided by Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät in its series Hannover Economic Papers (HEP) with number dp-501.
Length: 40 pages
Date of creation: Jul 2012
Date of revision:
experiments; prospect theory; risk preference; time preference; West Africa;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
This paper has been announced in the following NEP Reports:
- NEP-AFR-2012-10-06 (Africa)
- NEP-AGR-2012-10-06 (Agricultural Economics)
- NEP-ALL-2012-10-06 (All new papers)
- NEP-EVO-2012-10-06 (Evolutionary Economics)
- NEP-UPT-2012-10-06 (Utility Models & Prospect Theory)
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