Disentangling poor smallholder farmers' risk preferences and time horizons: Evidence from a field experiment in Ethiopia
SourceEuropean Journal of Development Research, 31, 3, (2019), pp. 558-580
Article / Letter to editor
Display more detailsDisplay less details
SW OZ RSCR CAOS
European Journal of Development Research
SubjectAnthropology and Development Studies
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.
Upload full text
Use your RU credentials (u/z-number and password) to log in with SURFconext to upload a file for processing by the repository team.