Risk Preferences as Determinants of Soil Conservation Decisions in Ethiopia

Hailemariam Teklewold and Köhlin, Gunnar
Authors registered in the RePEc Author Service: Gunnar Köhlin

RFF Working Paper Series from Resources for the Future

Abstract: Soil degradation is one of the most serious environmental problems in the highlands of Ethiopia. The prevalence of traditional agricultural land use and the absence of appropriate resource management often result in the degradation of natural soil fertility. This has important implications for soil productivity, household food security, and poverty. Given the extreme vulnerability of farmers in this area, we hypothesized that farmers’ risk preferences might affect the sustainability of resource use. This study presents experimental results on the willingness of farmers to take risks and relates the subjective risk preferences to actual soil conservation decisions. The study looks at a random sample of 143 households with 597 farming plots. We found that a high degree of risk aversion significantly decreases the probability of adopting soil conservation. This implies that reducing farmers’ risk exposure could promote soil conservation practices and thus more sustainable natural resource management. This might be achieved by improving tenure security, promoting access to extension services and education, and developing off-farm activities that generate income.

Keywords: adoption; Ethiopia; risk preference; soil conservation (search for similar items in EconPapers)
JEL-codes: D81 Q12 Q16 Q24 (search for similar items in EconPapers)
Date: 2010-08-23
New Economics Papers: this item is included in nep-afr, nep-agr, nep-env and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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