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Using Field Experiments to Elicit Risk and Ambiguity Preferences: Behavioural Factors and the Adoption of New Agricultural Technologies in Rural India

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  • Patrick S. Ward
  • Vartika Singh

Abstract

We conduct a series of experiments in rural India in order to measure preferences related to risk, loss, and ambiguity. By combining these results with a discrete choice experiment over new and familiar rice seeds, we demonstrate how these behavioural parameters affect decisions to adopt new agricultural technologies, especially when the new technologies are risk reducing. We find that risk averse and loss averse individuals are more likely to switch to new seeds demonstrating risk reducing characteristics, while, contrary to expectations, ambiguity averse individuals are no more willing to retain their status quo than switch to cultivating the new variety.

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  • Patrick S. Ward & Vartika Singh, 2015. "Using Field Experiments to Elicit Risk and Ambiguity Preferences: Behavioural Factors and the Adoption of New Agricultural Technologies in Rural India," Journal of Development Studies, Taylor & Francis Journals, vol. 51(6), pages 707-724, June.
    • Handle: RePEc:taf:jdevst:v:51:y:2015:i:6:p:707-724
    DOI: 10.1080/00220388.2014.989996
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    1. de Brauw, Alan & Eozenou, Patrick, 2014. "Measuring risk attitudes among Mozambican farmers," Journal of Development Economics, Elsevier, vol. 111(C), pages 61-74.
    2. Charness, Gary & Viceisza, Angelino, 2011. "Comprehension and risk elicitation in the field: Evidence from rural Senegal," IFPRI discussion papers 1135, International Food Policy Research Institute (IFPRI).
    3. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    4. Jim Engle-Warnick & Javier Escobal & Sonia Laszlo, 2007. "Ambiguity Aversion as a Predictor of Technology Choice: Experimental Evidence from Peru," CIRANO Working Papers 2007s-01, CIRANO.
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