2013
DOI: 10.1093/jae/ejt020
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Regional Variation in Risk and Time Preferences: Evidence from a Large-scale Field Experiment in Rural Uganda

Abstract: Experiments measuring risk and time preferences in developing countries have tended to have relatively small samples and geographically concentrated sampling. This largescale field experiment uses a Holt-Laury mechanism to elicit the preferences of 1289 randomly selected subjects from 94 villages covering six out of seven agro-climatic zones across rural Uganda. As in previous studies we find evidence of risk aversion and loss aversion amongst most subjects. In addition we find significant heterogeneity in ris… Show more

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Cited by 38 publications
(24 citation statements)
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“…Answer option A was fixed for all of the questions, while option B was increased by units of GH¢2.00. We used the discount rate at the game one switching point and the discount rate at the game two switching point to calculate the present bias of the individual [31].…”
Section: Data Collectionmentioning
confidence: 99%
“…Answer option A was fixed for all of the questions, while option B was increased by units of GH¢2.00. We used the discount rate at the game one switching point and the discount rate at the game two switching point to calculate the present bias of the individual [31].…”
Section: Data Collectionmentioning
confidence: 99%
“…As estimated in other similar studies, the risk aversion level is 0.68-0.97 in the United States of America (Holt and Laury 2002), 0.68-0.71 in India (Binswanger 1980), 0.81-2.00 in Zambia (Wik et al 2004 as cited in Tanaka et al 2014), 0.6 in Vietnam (Tanaka et al 2010), and 0.48 in other provinces of China (Liu 2013). The level of loss aversion is 3.93 in Uganda (Tanaka et al 2014) and 2.50-3.00 in other provinces of China (Liu, 2013). The overall average level of loss aversion in our research is 2.52, which is also lower than other estimates of loss aversion levels.…”
Section: Experimental Results and Empirical Study 1 Experimental Resmentioning
confidence: 56%
“…A detailed description of the Holt-Laury mechanism is presented later in this paper. Tanaka et al (2014) conducted a similar field experiment that covered all of Uganda. They divided the country into several areas according to the local landform, rainfall capacity, and crop.…”
Section: Introductionmentioning
confidence: 99%
“…This is intuitive in the sense that we would expect people in villages that are closer to local markets to have more access to information, resulting in more risk‐neutral preferences. Local environment. Risk preferences may differ significantly across agricultural climatic zones, proving that participants in the experiment were affected by regional factors and background risks posed by the local environment, as found by Tanaka and Munro () in Uganda. Farmers in the agro‐climatically least favorable zone that receives less rainfall on average and is more prone to drought (Nyangua) are the most risk averse. Cultural factors.…”
Section: Discussionmentioning
confidence: 72%