Risk attitude and economic welfare: A panel analysis on a multiethnic population in rural Viet Nam

Dien H. Pham

Journal of Asian Economics, 2023, vol. 88, issue C

Abstract: The relationship between economic welfare and general risk attitude is examined using a three-wave data set collected from 588 ethnically diverse households in Central Vietnam. Ethnic minorities account for about 30 % of the sample and include twelve different ethnic groups. Multivariate analysis is applied with single equation and equation-system estimating approaches. The results confirm that the ethnic majority (Kinh) are wealthier while willingly taking more risk, roughly one point higher on the 11-point Likert scale, compared to the ethnic minority. Risk attitudes and economic welfare are determined differently between the two groups, as minorities are more vulnerable to their socio-demographic characteristics, resources, and locations, which are more beneficial to the Kinh. Stronger risk-taking is positively associated with a better economic well-being among the ethnic majority, whereas this association is not found among extremely risk-averse ethnic minority. Findings of this study suggest that development policies should offer different treatments tailored to specific needs based on socio-demographic and cultural backgrounds including attitudes toward risks.

Keywords: Economic welfare; Circle of poverty; Ethnicity; Risk attitudes; Simultaneous equations model; Vietnam (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:88:y:2023:i:c:s1049007823000659

DOI: 10.1016/j.asieco.2023.101645

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