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Big Five Personality Traits, Poverty, and Environmental Shocks in Shaping Farmers’ Risk and Time Preferences: Experimental Evidence from Vietnam

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  • Trinh Khoa A.

    (Business Management Department, Greenwich Vietnam, FPT University, Da Nang Campus, 658 Ngo Quyen Street, An Hai, Da Nang, Vietnam)

Abstract

This study investigates factors influencing risk and time preferences through experiments with 575 farmers in Vietnam’s Mekong Delta, controlling for time effects and selection bias. Using a hyperbolic time-discounting model with fixed and variable cost components and instrumental variable estimation, we find that income poverty – but not multidimensional poverty (MP) – is significantly associated with greater patience. Patience also increases with openness to experience, while conscientiousness and credit access are linked to greater impatience. Credit access may promote short-term decision-making by increasing liquidity, debt pressure, and immediate consumption incentives. Risk preferences, assessed through incentivized and nonincentivized Eckel-Grossman tasks, are not significantly linked to poverty, but are positively associated with credit access, emotional stability, openness, ethnicity, and exposure to natural disasters. Borrowing status strongly correlates with risk tolerance, suggesting that financial access supports calculated risk-taking, whereas MP is negatively related to such behavior. Natural disasters appear to foster adaptive risk-taking through repeated exposure to shocks. Overall, farmers’ economic decisions are more influenced by environmental shocks, personality traits, and credit access than by poverty alone. Policymakers should integrate financial and behavioral strategies – expanding credit, designing adaptive financial tools, and implementing financial literacy programs – to strengthen economic resilience and risk management.

Suggested Citation

  • Trinh Khoa A., 2025. "Big Five Personality Traits, Poverty, and Environmental Shocks in Shaping Farmers’ Risk and Time Preferences: Experimental Evidence from Vietnam," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 19(1), pages 1-21.
    • Handle: RePEc:bpj:econoa:v:19:y:2025:i:1:p:21:n:1003
    DOI: 10.1515/econ-2025-0172
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    Keywords

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    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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