Is households’ risk attitude robust to different experimental payoffs?

ABSTRACT

We compared risk attitudes among rural people in Tanzania and Kenya using an experimental design where payoffs were defined and quantified in maize and milk production. About 42% of the sample revealed different risk attitude between the two payoff types. The difference was mainly explained by household livelihood strategy, geographical location and ethnicity. Hence, appropriate pay-off metrics differ across contexts and different metrics may provide noncomparable results that does not reflect intrinsic risk attitude.

KEYWORDS:

• Risk attitude
• Greater Serengeti-Mara Ecosystem
• Production-based risk experiment

JEL CLASSIFICATION:

• D13
• D15
• C93

Acknowledgements

The authors acknowledge assistance from TAWIRI and ILRI for carrying out field data collection. Financial support for the study was provided under the EU Horizon 2020 project AfricanBioServices (Grant No. 641918). Jette Bredahl Jacobsen also acknowledges support from the Danish National Research Foundation to the Center for Macroecology and Climate (Grant No. DNRF096).

Disclosure statement

No potential conflict of interest was reported by the authors.

Supplementary materials

Supplementary materials can be accessed here.

Additional information

Funding

The study was funded by the European Union’s Horizon 2020 research and innovation program through the AfricanBioServices project [Grant No. 641918].