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Risk and Ambiguity Preferences and the Adoption of New Agricultural Technologies: Evidence from Field Experiments in Rural India

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  • Ward, Patrick S.
  • Singh, Vartika
Abstract
In this paper we conduct a series of field experiments in rural India in order to measure preferences related to risk, loss, and ambiguity. Disaggregating by data, we find that on average women are significantly more risk averse and loss averse than men, though the higher average risk aversion arises due to a greater share of women who are extremely risk averse. Through a series of two empirical examples, we demonstrate how these parameters affect decisions to adopt new agricultural technologies. By combining these results with a choice experiment over new and familiar rice seeds, we find that ambiguity averse individuals are far more likely to stick with seeds they are familiar with, while a greater degree of loss aversion generally suggests people are more willing to switch to a new variety.

Suggested Citation

  • Ward, Patrick S. & Singh, Vartika, 2013. "Risk and Ambiguity Preferences and the Adoption of New Agricultural Technologies: Evidence from Field Experiments in Rural India," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150794, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea13:150794
    DOI: 10.22004/ag.econ.150794
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    Cited by:

    1. Toritseju Begho, 2021. "Using Farmers’ Risk Tolerance to Explain Variations in Adoption of Improved Rice Varieties in Nepal," Journal of South Asian Development, , vol. 16(2), pages 171-193, August.
    2. Kebede, Bereket & Zizzo, Daniel John, 2015. "Social Preferences and Agricultural Innovation: An Experimental Case Study from Ethiopia," World Development, Elsevier, vol. 67(C), pages 267-280.
    3. Alvarado, E. & Ibanez, M. & Brummer, B., 2018. "Understanding how risk preferences and social capital affect farmers’ behavior to anticipatory and reactive adaptation options to climate change: the case of vineyard farmers in central Chile," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275978, International Association of Agricultural Economists.
    4. Omotuyole Isiaka Ambali & Francisco Jose Areal & Nikolaos Georgantzis, 2021. "On Spatially Dependent Risk Preferences: The Case of Nigerian Farmers," Sustainability, MDPI, vol. 13(11), pages 1-16, May.
    5. Visser, Martine & Jumare, Hafsah & Brick, Kerri, 2020. "Risk preferences and poverty traps in the uptake of credit and insurance amongst small-scale farmers in South Africa," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 826-836.
    6. Jumare, Hafsah & Visser, Martine & Brick, Kerri, 2017. "Risk Preferences and the Poverty Trap: A Look at Farm Technology Uptake amongst Smallholder Farmers in the Matzikama Municipality," EfD Discussion Paper 17-14, Environment for Development, University of Gothenburg.
    7. Ward, Patrick S. & Ortega, David L. & Spielman, David J. & Singh, Vartika & Magnan, Nicholas, 2013. "Farmer Preferences for Abiotic Stress Tolerance in Hybrid versus Inbred Rice: Evidence from Bihar, India," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150786, Agricultural and Applied Economics Association.
    8. Peterson, Hikaru & Yamaura, Koichi, 2014. "Ambiguity Aversion and Preferences for Food Origin Post Fukushima Nuclear Disaster," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170552, Agricultural and Applied Economics Association.
    9. Kanchan Joshi & Thiagu Ranganathan & Ram Ranjan, 2021. "Exploring Higher Order Risk Preferences of Farmers in a Water-Scarce Region: Evidence from a Field Experiment in West Bengal, India," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 19(2), pages 317-344, June.
    10. Suzuki, Aya, 2014. "Risk on Dynamic Behavior of Farmers in the Export Market: A Case from the Pineapple Industry in Ghana," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170665, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Community/Rural/Urban Development; Consumer/Household Economics; International Development; International Relations/Trade; Research Methods/ Statistical Methods;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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