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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.

Suggested Citation

  • 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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    References listed on IDEAS

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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. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    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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    Citations

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    Cited by:

    1. Ray, M. & Maredia, M. & Shupp, R., 2018. "Risk Preferences and Climate Smart Technology Adoption: A Duration Model Approach for India," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277502, International Association of Agricultural Economists.
    2. Pan He & Marcella Veronesi & Stefanie Engel, 2016. "Consistency of Risk Preference Measures and the Role of Ambiguity: An Artefactual Field Experiment from China," Working Papers 03/2016, University of Verona, Department of Economics.
    3. Khan, Md. Tajuddin & Kishore, Avinash & Joshi, Pramod Kumar, 2016. "Gender dimensions on farmers’ preferences for direct-seeded rice with drum seeder in India:," IFPRI discussion papers 1550, International Food Policy Research Institute (IFPRI).
    4. Ward, Patrick S. & Bell, Andrew R. & Droppelmann, Klaus & Benton, Tim, 2016. "Understanding compliance in programs promoting conservation agriculture: Modeling a case study in Malawi," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235610, Agricultural and Applied Economics Association.
    5. Ray, Mukesh & Maredia, Mywish, 2016. "Do Smaller States Lead to More Development? Evidence from Splitting of Large States in India," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235732, Agricultural and Applied Economics Association.
    6. Kaelab K. Haile & Eleonora Nillesen & Nyasha Tirivayi, 2019. "Impact of Formal Climate Risk Transfer Mechanisms on Risk-Aversion: Empirical Evidence from Rural Ethiopia," CESifo Working Paper Series 7717, CESifo Group Munich.
    7. Cárcamo, Jorge & von Cramon-Taubadel, Stephan, 2016. "Assessing small-scale raspberry producers’ risk and ambiguity preferences: evidence from field- experiment data in rural Chile," Department of Agricultural and Rural Development (DARE) Discussion Papers 260774, Georg-August-Universitaet Goettingen, Department of Agricultural Economics and Rural Development (DARE).
    8. repec:eee:jeborg:v:162:y:2019:i:c:p:106-119 is not listed on IDEAS
    9. Freudenreich, Hanna & Musshoff, Oliver & Wiercinski, Ben, 2017. "The Relationship between Farmers' Shock Experiences and their Uncertainty Preferences - Experimental Evidence from Mexico," GlobalFood Discussion Papers 256212, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    10. Freudenreich, H., 2018. "Explaining Mexican Farmers Adoption of Hybrid Maize Seed - The Role of Social Psychology, Risk and Ambiguity Aversion," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277410, International Association of Agricultural Economists.
    11. Fishman, Ram & Kishore, Avinash & Rothler, Yoav & Ward, Patrick, 2016. "Can Information Help Reduce Imbalanced Application of Fertilizers in India? Experimental Evidence from Bihar," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235705, Agricultural and Applied Economics Association.
    12. Cárcamo, Jorge & Cramon-Taubadel, Stephan von, 2016. "Assessing small-scale raspberry producers' risk and ambiguity preferences: Evidence from field-experiment data in rural Chile," DARE Discussion Papers 1610, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    13. Ray, Mukesh K. & Maredia, Mywish K. & Shupp, Robert S., 2017. "Risk Preferences and the Pace of Climate Smart Technology Adoption: A Duration Model Approach from India," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258255, Agricultural and Applied Economics Association.
    14. repec:spr:nathaz:v:95:y:2019:i:3:d:10.1007_s11069-018-3523-5 is not listed on IDEAS
    15. repec:oup:erevae:v:44:y:2017:i:2:p:285-308. is not listed on IDEAS
    16. repec:eee:wdevel:v:115:y:2019:i:c:p:178-189 is not listed on IDEAS
    17. Gars, Jared & Ward, Patrick S., 2016. "The role of learning in technology adoption: Evidence on hybrid rice adoption in Bihar, India," IFPRI discussion papers 1591, International Food Policy Research Institute (IFPRI).

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