Attitudes toward uncertainty among the poor: an experiment in rural Ethiopia
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We investigate risk and ambiguity attitudes among Ethiopian farmers in one of the poorest regions of the world. Strong risk aversion and ambiguity aversion were found with the Ethiopian farmers. We compared their attitudes to those of a Western university student sample elicited by the same decision task. Ambiguity aversion was similar for farmers and students, but farmers were more risk averse. Our results show that ambiguity aversion is not restricted to Western student populations, and that studies of agricultural decisions may benefit from explicitly considering ambiguity attitudes.
KeywordsRisk attitudes Ambiguity attitudes Poverty Agriculture
JEL ClassificationD81 C93 O12
Financial support from the Swedish Research Council (Vetenskapsrådet), the Jan Wallander and Tom Hedelius Foundation, and Sida (Swedish International Development Cooperation Agency) to the Environmental Economics Unit at the University of Gothenburg is gratefully acknowledged. Trautmann acknowledges financial support by a VENI grant of the Netherlands Foundation for Scientific Research (NWO).
This article is distributed under the terms of the Creative Commons Attribution Noncommercial License which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.
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