Abstract:
Attitudes towards risk were measured using an experimental gambling approach with real payoffs. The experiments indicate that on the average more than 80% of the farmers are moderately to extremely risk averse; that they exhibit decreasing absolute risk aversion and increasing partial risk aversion. Moreover, they are more risk averse in games with gains and losses, than with games with gains only. Farmers in northern Zambia showed a wider spread in risk aversion and more risk averse behavior than farmers in similar studies in Asia.

A theoretical framework for analyzing how risk aversion and market imperfections may influence cropping decisions of farm households was developed. Econometric analyses indicated that household specific variables, such as gender and education, market imperfections in commodity and credit markets, and to a similar degree individual risk aversion, influence cropping decisions of farm households.

Key words: Experimental games, risk preferences, farm household decision making, development, Zambia.

Mette Wik was born in Tønsberg, Norway in 1961. She holds a M.Sc in Agricultural Economics from the Agricultural University of Norway (1986), and a Dr. Scient degree in Agricultural and Resource Economics from NLH (1998). He is currently a research fellow at the Department of Economics & Social Sciences, the Agricultural University of Norway (1998).

Associate professor Stein Holden was the advisor of this dissertation

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