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The role of risk in shaping production decisions: an empirical analysis

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  • Ruth Vargas Hill

Abstract

This paper uses data on risk preferences and perceptions of risk collected through hypothetical questions in combination with more traditional measures of a households` ability to deal with risk to identify the impact of risk on production decisions. Contextualized hypothetical questions on risk preferences and risk perceptions were collected along with standard socioeconomic survey for 300 coffee-farming households in Uganda. This data is used here to show both that data collected from hypothetical questions can be usefully utilised to understand a household`s behaviour under risk in real settings, and that risk has a significant impact on the production decisions of poor coffee farmers in Uganda.

Suggested Citation

  • Ruth Vargas Hill, 2006. "The role of risk in shaping production decisions: an empirical analysis," Economics Series Working Papers GPRG-WPS-049, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:wpaper:gprg-wps-049
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    1. Hans P. Binswanger, 1980. "Attitudes Toward Risk: Experimental Measurement in Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(3), pages 395-407.
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    Cited by:

    1. McKenzie, David & Gibson, John & Stillman, Steven, 2013. "A land of milk and honey with streets paved with gold: Do emigrants have over-optimistic expectations about incomes abroad?," Journal of Development Economics, Elsevier, vol. 102(C), pages 116-127.
    2. Adeline Delavande & Hans-Peter Kohler, 2009. "Subjective expectations in the context of HIV/AIDS in Malawi," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 20(31), pages 817-875.

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