Study Data from Wageningen University and Research Center Provide New Insights into Agriculture (Relating Risk Preferences and Risk Perceptions Over Different Agricultural Risk Domains: Insights From Ethiopia): Agriculture

2023 FEB 10 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Data detailed on Agriculture have been presented. According to news reporting from Wageningen, Netherlands, by NewsRx journalists, research stated, “Households in developing countries are exposed to various shocks and risks, which leaves them vulnerable as they typically have limited resources to cope with them. Even though a large body of development literature has focused on the role of risk in rural livelihoods, the focus is often on single sources of risk and taking a unidimensional view on risk preference.”

Financial support for this research came from VLIR-UOS, under the Interuniversity Cooperation Programs.

The news correspondents obtained a quote from the research from Wageningen University and Research Center, “This paper explores the diversity in risk perception and risk preferences of Ethiopian households by combining incentivized field experiments with detailed primary household survey data. We disentangle the relationship between risk perception and risk preferences using an innovative combination of time framing and instrumental variable estimation approaches. We find that our respondents are exposed to multiple past shocks and perceive multiple sources of future threats across different agricultural risk domains. Our respondents can be characterized as relatively risk-averse and loss-averse, and they also overweight unlikely extreme outcomes. We find a statistically significant association between the prospect theory risk preferences parameters-risk aversion, loss aversion, and probability weighting-and overall risk perception, domain-specific risk perceptions (except for the personal domain) and the impact dimension of future risk. Our findings make an important contribution to our understanding of farm households’ risk behavior, and can guide prioritizing development efforts to stimulate better informed and well-targeted risk management policy interventions. CO 2022 The Author(s). Published by Elsevier Ltd.”

According to the news reporters, the research concluded: “This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).”

This research has been peer-reviewed.

For more information on this research see: Relating Risk Preferences and Risk Perceptions Over Different Agricultural Risk Domains: Insights From Ethiopia. World Development, 2023;162. World Development can be contacted at: Pergamon-elsevier Science Ltd, The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB, England. (Elsevier - www.elsevier.com; World Development - http://www.journals.elsevier.com/world-development/)

Our news journalists report that additional information may be obtained by contacting Yann de Mey, Wageningen University and Research Center, Dept. of Social Sciences, Business Economics Group, Wageningen, Netherlands. Additional authors for this research include Ashenafi Duguma Feyisa and Miet Maertens.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.worlddev.2022.106137. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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