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Ambiguity Aversion and Individual Adaptation to Climate Change: Evidence from a Farmer Survey in Northeastern Thailand

Nagisa Yoshioka, Hide-Fumi Yokoo, Voravee Saengavut () and Siraprapa Bumrungkit

No 2020-06, Discussion Papers from Graduate School of Economics, Hitotsubashi University

Abstract: Understanding the triggers of individual adaptation behavior is critical for empowering those who are highly vulnerable to climate change. This study explores the effect of ambiguity aversion on adaptation behaviors in the context of climate change. We conduct a field survey on 230 rice farmers in northeastern Thailand to examine the association between the elicited ambiguity aversion and the implementation of climate change adaptation. We find that ambiguity aversion does not encourage farmers’ adaptation behaviors and can even discourage the uptake of adaptation strategies. The role of ambiguity aversion varies depending on the characteristics of the adaptation strategy: Ambiguity-averse farmers are less likely to adopt adaptation strategies that entail shifts from the status quo. A deliberate approach is needed to understand farmers’ adaptation behaviors outside the laboratory setting and to reduce ambiguity in the results concerning adaptation to increasing climate risk.

Keywords: ambiguity aversion; climate change adaptation; Thailand; weather index insurance (search for similar items in EconPapers)
JEL-codes: O13 Q12 Q54 (search for similar items in EconPapers)
Pages: 28 p.
Date: 2020-08
New Economics Papers: this item is included in nep-agr, nep-env, nep-sea and nep-upt
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Handle: RePEc:hit:econdp:2020-06