Staff Publications

Staff Publications

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    'Staff publications' is the digital repository of Wageningen University & Research

    'Staff publications' contains references to publications authored by Wageningen University staff from 1976 onward.

    Publications authored by the staff of the Research Institutes are available from 1995 onwards.

    Full text documents are added when available. The database is updated daily and currently holds about 240,000 items, of which 72,000 in open access.

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Record number 542434
Title Disentangling Poor Smallholder Farmers’ Risk Preferences and Time Horizons : Evidence from a Field Experiment in Ethiopia
Author(s) Alemayehu, Molla; Beuving, Joost; Ruben, Ruerd
Source European Journal of Development Research (2018). - ISSN 0957-8811
DOI https://doi.org/10.1057/s41287-018-0168-x
Department(s) LEI Programmamanagement
Publication type Refereed Article in a scientific journal
Publication year 2018
Keyword(s) Ethiopia - Experimental economics - Risk behaviour - Rural poverty - Smallholder farmers - Time preference
Abstract

This paper considers the economic behaviour of smallholder farmers in eastern Ethiopia and its effects on their poverty status, looking specifically at how farmers deal with production risk and various time horizons. Earlier studies in rural Africa suggested that these are interlinked but that remains analytically unsatisfactory. Through experiments, we seek to disentangle risk preferences and time horizons regarding their impact on poverty. We find that the studied farmers are highly risk-averse and time-impatient; few farmers make longer-term investments. This appears to be covariant with wealth and household indicators, with poorer, less-educated farmers with smaller landholdings making less risky investments, thus yielding smaller returns, which shorten their time horizons. This finding is relevant for rural development policies, in particular suggesting how untying the Gordian knot of risk and time that reproduces rural poverty depends on the simultaneous operation of market and state forces.

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