Relating risk preferences and risk perceptions over different agricultural risk domains: Insights from Ethiopia

Feyisa, Ashenafi; Maertens, Miet; Mey, Yann de

doi:10.1016/j.worlddev.2022.106137

Cited by 10 publications

(7 citation statements)

References 66 publications

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“…Besides heuristics and objective risk characteristics, personal characteristics such as risk preferences have been identified as shaping risk perception (Feyisa et al, 2023;Villacis et al, 2021). In economic theories of decision making, risk preferences/attitudes refer to the willingness of an individual to face a potentially risky situation (Feyisa et al, 2023). Negative attitudes may result in an elevated view of risk levels, such as the probability of loss (Prince & Kim, 2021).…”

Section: Personal Characteristicsmentioning

confidence: 99%

Factors of influence on flood risk perceptions related to Hurricane Dorian: an assessment of heuristics, time dynamics and accuracy of risk perceptions

de Wolf,

Robinson,

Botzen

et al. 2023

Preprint

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Abstract. Flood damage caused by hurricanes is expected to rise globally due to climate and socio-economic change. Enhanced flood preparedness among the coastal population is required to reverse this trend. The decisions and actions taken by individuals are thought to be influenced by risk perceptions. This study investigates the determinants that shape flood risk perceptions, as well as the factors that drive flood risk misperceptions of coastal residents. We conducted a survey among 871 residents in flood-prone areas in Florida during a five-day period in which the respondents were threatened to be flooded by Hurricane Dorian. This approach allows for assessing temporal dynamics in flood risk perceptions during an evolving hurricane threat. Among 255 of the same households, a follow-up survey was conducted to examine how flood risk perceptions vary after Hurricane Dorian failed to make landfall in Florida. Our results show that the flood experience and social norms have the most consistent relationship with flood risk perceptions. Furthermore, participants indicated that their level of worry regarding the dangers of flooding decreased after the near-miss of Hurricane Dorian, compared to their feelings of worry during the hurricane event. Based on our findings, we offer recommendations for improving flood risk communication policies.

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Section: Personal Characteristicsmentioning

confidence: 99%

Factors of influence on flood risk perceptions related to Hurricane Dorian: an assessment of heuristics, time dynamics and accuracy of risk perceptions

de Wolf,

Robinson,

Botzen

et al. 2023

Preprint

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“…These results contribute to the literature reporting violations of fungibility in the developing-country context [5,6], and also to the literature exploring the adoption of risk-pooling mechanisms through the use of lab-in-the-field experiments. The literature devoted to the measurement of risk preferences and its correlation with relevant development outcomes is ample [13][14][15][16][17][18]. Here, our contribution is measuring the trade-off between a cash payment and accepting an in-kind (potentially non-fungible) payment method that brings a risk-reduction framed as an insurance.…”

Section: Introductionmentioning

confidence: 99%

Are non-fungible payments attractive when they reduce risk exposure? Evidence from Colombia

Cano,

Cortés,

Mantilla

et al. 2024

PLoS ONE

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We conducted a lab-in-the-field experiment in which 214 Colombian rural workers must choose between cash or voucher payment for completing a real effort task. Although the voucher may be perceived as non-fungible, it halves the probability of suffering a negative shock that will reduce the participant’s payment by two-thirds. Participants made four decisions in which we vary the voucher values such that this payment method offers, in expectation, between 88% to 123% of the cash payment (fixed across decisions). We find that uptake rates go from 32% to 56%, from the least to the most generous voucher. These rates are consistently larger compared to a reference sample of undergrad students from the same region (p–values from the χ2 tests for all four decisions fall below 0.035). Our between-subjects variations reveal that presenting the vouchers in descending order yields a higher uptake than the ascending order (p < 0.001 for the corresponding coefficient in a tobit and ordered logit regressions including municipality characteristics, an effect driven by the two decisions with the lowest voucher values, with p–values of 0.008 and 0.072 in the χ2 tests, respectively). We interpret this result as an endowment effect of the voucher’s risk reduction.

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“…The latter are limited in trials since these are small fields where inputs are provided by researchers. Farmers in West Africa are known to be rather loss averse (Feyisa et al, 2023). Because of the importance of cereal crops in the system, we hypothesise that farmers were less willing to take risks and/or already finetuned the management according to the maximum of their available resources.…”

Section: Local Tailoring Of the Agronomic Optionsmentioning

confidence: 98%

“…Nevertheless, existing variability of return plays an important role in farmers decision making, especially in volatile environments. Farmers may prefer stability over maximisation of yields (Descheemaeker et al, 2019;Feyisa et al, 2023).…”

Section: Paradigm Shifts In Researchmentioning

confidence: 99%

“…Second, the average yield does not take into account the variability existing in time and space, which plays an important role in farmers' decisions (Vanlauwe et al, 2019). Farmers may prefer a stable but lower yield instead of a higher yield with the risk of losses (Feyisa et al, 2023). Third, grain yield is a crucial indicator for farmers, yet it does not take into account other factors that farmers might appreciate such as taste, harvest time, fodder production, cost-benefit, or labour requirements (Michalscheck et al, 2018;Ronner et al, 2019).…”

Section: Introductionmentioning

confidence: 99%

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Not wrapped up in cotton wool : how risk influences farming in southern Mali

Huet

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West African farmers are exposed to a variety of risks, including climate variability. Moreover, trends of population growth, declining natural resources and climate change increase the probability of hazards and extreme events. In this environments, farmers are often struggling to be food selfsufficient or escape poverty. We focused on the area of Koutiala, southern Mali, as an illustrative region for the challenging farming conditions in West Africa.The aim of this thesis was to understand farmers' strategies to cope within a variable and hazardous environment. A parallel objective was to analyse which sustainable intensification options could increase productivity and/or reduce risks within the socio-economic and biophysical context. Risk was defined as the combination of the probability of a hazard taking place and the impact this induces. To analyse risk perception and suitability of on-farm options several data sources were combined: responses from individual surveys and focus group discussions, outputs from crop model simulations, long-term weather data and evaluations of trials and try-out fields embedded within a long-term participatory process.Risks related to health of family members were perceived as the highest, followed by risks related to health of livestock. Farmers managed those risks by maintaining flexibility and diversity in the farm management which allowed them to limit the impact and react quickly when hazards happened.Farmers overcame losses by relying on social interactions and using productive assets, e.g. selling cattle. Hence, they lost capital. Within households, differences in risk perception were related to decision-power, not to gender. Between farms, risk perception was related to resource endowment to a limited extent. The frequency and impact on yield of some hazards were quantified using crop simulation data. Weather hazards occurred at least every five years and reduced cereal yields. The impact of hazards on cereal yields (maize, sorghum, millet) interacted with the cereal management (early sowing, increasing N fertilisation and/or introducing a short duration variety). Increasing maize yields through management did not affect relative yield losses in case of hazards. Adapted millet management caused a trade-off between yield and hazard impact. Adapted sorghum management increased yield and mitigated hazard impacts simultaneously. Further, I demonstrated that on-farm diversification of crop land allocation had the potential to increase stability. The combination of cotton and a cereal had a relatively strong stabilisation benefit, as cotton and the cereals responded differently to weather. While the majority of diversification strategies enabled farmers to meet the food sufficiency requirements, farmers had to target combinations with a high mean return and large variability in order to surpass the poverty line. Within this environment, an iterative and participatory co-learning cycle facilitated a learning environment for researchers and farmers. This process yielded a diver...

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Relating risk preferences and risk perceptions over different agricultural risk domains: Insights from Ethiopia

Cited by 10 publications

References 66 publications

Factors of influence on flood risk perceptions related to Hurricane Dorian: an assessment of heuristics, time dynamics and accuracy of risk perceptions

Factors of influence on flood risk perceptions related to Hurricane Dorian: an assessment of heuristics, time dynamics and accuracy of risk perceptions

Are non-fungible payments attractive when they reduce risk exposure? Evidence from Colombia

Not wrapped up in cotton wool : how risk influences farming in southern Mali

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