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Attitudes toward Uncertainty among the Poor: Evidence from Rural Ethiopia

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Author Info

  • Akay, Alpaslan

    ()
    (University of Gothenburg)

  • Martinsson, Peter

    ()
    (University of Gothenburg)

  • Medhin, Haileselassie

    ()
    (University of Gothenburg)

  • Trautmann, Stefan T.

    ()
    (Tilburg University)

Abstract

We looked at risk and ambiguity attitudes among Ethiopian peasants in one of the poorest regions of the world and compared their attitudes to a standard Western university student sample elicited by the same decision task. Strong risk aversion and ambiguity aversion were found with the Ethiopian peasants. Ambiguity aversion was similar for peasants and students, but peasants were more risk averse. Testing for the effect of socio-economic variables on uncertainty attitudes showed that poor health increased both risk and ambiguity aversion.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4225.

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Length: 24 pages
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4225

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Keywords: cultural differences; risk attitudes; ambiguity attitudes; poverty;

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References

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Citations

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Cited by:
  1. Ralf Bergheim & Michael W.M. Roos, 2013. "Intuition and Reasoning in Choosing Ambiguous and Risky Lotteries," Ruhr Economic Papers 0440, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. Dean Spears, 2013. "Poverty and probability: aspiration and aversion to compound lotteries in El Salvador and India," Experimental Economics, Springer, vol. 16(3), pages 263-284, September.
  3. Oechssler, Jörg & Roomets, Alex, 2014. "A Test of Mechanical Ambiguity," Working Papers 0555, University of Heidelberg, Department of Economics.
  4. Vieider, Ferdinand M. & Truong, Nghi & Martinsson, Peter & Pham Khanh Nam & Martinsson, Peter, 2013. "Risk preferences and development revisited: A field experiment in Vietnam," Discussion Papers, WZB Junior Research Group Risk and Development SP II 2013-403, Social Science Research Center Berlin (WZB).
  5. Choudhury, Hari K. & Goswami, Kishor, 2013. "Determinants of expansion of area under jatropha plantation in North East India: A Tobit analysis," Forest Policy and Economics, Elsevier, vol. 30(C), pages 46-52.
  6. Gary Charness & Edi Karni & Dan Levin, 2013. "Ambiguity attitudes and social interactions: An experimental investigation," Journal of Risk and Uncertainty, Springer, vol. 46(1), pages 1-25, February.
  7. Vieider, Ferdinand M. & Chmura, Thorsten & Martinsson, Peter, 2012. "Risk attitudes, development, and growth: Macroeconomic evidence from experiments in 30 countries," Discussion Papers, WZB Junior Research Group Risk and Development SP II 2012-401, Social Science Research Center Berlin (WZB).
  8. Ross, Nicholas & Santos, Paulo & Capon, Timothy, 2012. "Risk, ambiguity and the adoption of new technologies: experimental evidence from a developing economy," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126492, International Association of Agricultural Economists.
  9. repec:hal:journl:halshs-00429573 is not listed on IDEAS
  10. Choudhury, Hari K. & Goswami, Kishor, 2014. "Do Different Approaches to Measurement of Risk Behaviour Yield Different Results?," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 27(1).

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