New publication on Risk preferences and development revisited
Our UEH Shool of Economics staff, Dr. Pham Khanh Nam and Dr. Truong Cong Thanh Nghi have just published a new paper on Theory and Decision about the risk preferences by obtaining rich measures of the risk preferences of a sample of Vietnamese farmers and then revisiting the link between risk preferences and economic well-being.
Far from being particularly risk averse, Vietnamese farmers are on average risk neutral and, thus, more risk tolerant than typical Western subject populations. This generalises recent findings indicating that students in poorer countries are more risk tolerant than students in richer countries to a general population sample. Risk aversion is, furthermore, negatively correlated with income within their sample, but does not correlate with wealth. This also casts doubt on high levels of risk aversion causing failure to adopt new technologies, which they have discussed in the paper.
The online version of this article is available at https://doi.org/10.1007/s11238-018-9674-8 with supplementary material, which is available to authorized users.