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Determinants of farmers’ off-farm work decisions: How important are domain specific risk and uncertainty attitudes?

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  • Begho, Toritseju

Abstract

The paper examines the relationship between off-farm work decisions and risk and uncertainty attitudes. Data was obtained from controlled lab-in-field experiment on farmers’ choices over pairs of continuous prospects. The paper estimated parametric functional forms of the value and weighting functions based on cumulative prospect theory and examined the effect on important off-farm work decisions. The paper find evidence that farmers that participated in off-farm jobs were more averse to losses under conditions of risk but not so for uncertainty. However, these categories of farmers were more pessimistic about losses under both conditions (i.e. risk and uncertainty). The results also show that risk and uncertainty aversion significantly differ between farmers that participated in paid versus self-employed off-farm jobs. The result also shows that age, farm size, tenure, location, membership of association, location are significant determinants off-farm work decisions.

Suggested Citation

  • Begho, Toritseju, 2020. "Determinants of farmers’ off-farm work decisions: How important are domain specific risk and uncertainty attitudes?," 94th Annual Conference, April 15-17, 2020, K U Leuven, Belgium (Cancelled) 303708, Agricultural Economics Society - AES.
    • Handle: RePEc:ags:aesc20:303708
    DOI: 10.22004/ag.econ.303708
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    References listed on IDEAS

    as
    1. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    2. Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2010. "Risk and Time Preferences: Linking Experimental and Household Survey Data from Vietnam," American Economic Review, American Economic Association, vol. 100(1), pages 557-571, March.
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    Keywords

    Farm Management; Risk and Uncertainty;

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