Discussion Paper

Attitudes Toward Uncertainty Among the Poor: Evidence from Rural Ethiopia

Feb 22, 2010 | Alpaslan Akay, Peter Martinsson, Haileselassie A Medhin, Stefan Trautmann

This was created in partnership with Environment for Development .

Abstract

We looked at risk and ambiguity attitudes among Ethiopian peasants in one of the poorest regions of the world and compared their attitudes to a standard Western university student sample elicited by the samedecision task. Strong risk aversion and ambiguity aversion were found with the Ethiopian peasants, and these attitudes are similar to those of the university students. Testing for the effect of socioeconomicvariables on uncertainty attitudes showed that poor health increased both risk and ambiguity aversion.