Simultaneous estimation of risk and time preferences among small-scale cattle farmers in West Africa

Sabine Liebenehm and Hermann Waibel

Hannover Economic Papers (HEP) from Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät

Abstract: This study investigates risk and time preferences of small-holder cattle farmers in West Africa. We apply a discounted utility model and jointly estimate a prospect theory-based utility function and a quasi-hyperbolic discounting function using a maximum likelihood method. Results show that West African farmers are less loss-averse and are more patient than suggested by comparable studies in Asian developing countries. The main factors influencing farmers' risk and time preferences are cattle herd size and net revenue from sales of cattle products.

Keywords: experiments; prospect theory; risk preference; time preference; West Africa (search for similar items in EconPapers)
JEL-codes: C61 C93 D81 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2012-07
New Economics Papers: this item is included in nep-afr, nep-agr, nep-evo and nep-upt
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