ethiopia kenya | Policy design

Poverty, Risk Aversion, and Path Dependence in Low-Income Countries: Experimental Evidence from Ethiopia

In most low-income countries, rural households depend on mixed rain-fed agriculture/livestock production, which is very risky. Due to numerous market failures, there are few ways to shift risks to third parties.

This paper estimates levels and determinants of risk aversion in the highlands of Ethiopia. We find high risk aversion and evidence that constraints have important impacts on risk-averting behavior with perhaps significant implications for long-term poverty. The results also suggest the possibility of path dependence and offer insights into links between risk aversion and poverty traps.

EfD Authors

Sponsors

Keywords

Links

Centers

  • ethiopia
  • kenya

Type of publication

  • Peer reviewed

Reference

Mahmud Yesuf and Randall A. Bluffstone, 2009, "Poverty, Risk Aversion, and Path Dependence in Low-Income Countries: Experimental Evidence from Ethiopia", American Journal of Agricultural Economics, 2009 Vol.91, Issue 4, Pp 1022 - 1037

Publications

EfD Newsletter

Subscribe to our Newsletter service

Join or share



Follow EfD on Twitter
Join EfD on LinkedInJoin EfD on LinkedIn

See Also

Private Trees as Household Assets and Determinants of Tree-Growing Behavior in Rural Ethiopia

This study looked into tree-growing behavior of rural households in Ethiopia. With data collected [cont...]

Tenure security, resource poverty, public programs, and household plot-level conservation [...]

Land degradation poses a serious problem for the livelihoods of rural producers. Furthermore, there [cont...]