Attitudes Toward Uncertainty Among the Poor: Evidence from Rural Ethiopia

24 Pages Posted: 21 Jun 2009

See all articles by Alpaslan Akay

Alpaslan Akay

IZA Institute of Labor Economics

Peter Martinsson

University of Gothenburg - Department of Economics and Statistics

Haileselassie Medhin

University of Gothenburg - School of Global Studies

Stefan T. Trautmann

Heidelberg University - Alfred Weber Institute for Economics

Abstract

We looked at risk and ambiguity attitudes among Ethiopian peasants in one of the poorest regions of the world and compared their attitudes to a standard Western university student sample elicited by the same decision task. Strong risk aversion and ambiguity aversion were found with the Ethiopian peasants. Ambiguity aversion was similar for peasants and students, but peasants were more risk averse. Testing for the effect of socio-economic variables on uncertainty attitudes showed that poor health increased both risk and ambiguity aversion.

Keywords: risk attitudes, ambiguity attitudes, poverty, cultural differences

JEL Classification: D81, C93, O12

Suggested Citation

Akay, Alpaslan and Martinsson, Peter and Medhin, Haileselassie and Trautmann, Stefan T., Attitudes Toward Uncertainty Among the Poor: Evidence from Rural Ethiopia. IZA Discussion Paper No. 4225, Available at SSRN: https://ssrn.com/abstract=1423341

Alpaslan Akay (Contact Author)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Peter Martinsson

University of Gothenburg - Department of Economics and Statistics ( email )

Box 640
Vasagatan 1, E-building, floor 5 & 6
Göteborg, 40530
Sweden

Haileselassie Medhin

University of Gothenburg - School of Global Studies ( email )

POB 700
Gothenburg, SE 40530
Sweden

Stefan T. Trautmann

Heidelberg University - Alfred Weber Institute for Economics ( email )

Grabengasse 14
Heidelberg, D-69117
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
80
Abstract Views
727
rank
362,464
PlumX Metrics