IDEAS home Printed from https://ideas.repec.org/a/ags/gewipr/262076.html
   My bibliography  Save this article

Exposure to Risk and Risk Management in Smallholder Agriculture

Author

Listed:
  • Ayenew, H.Y.
  • Sauer, J.
  • Abate-Kassa, G.

Abstract

Using a moment based approach, introduced by Antle for producers’ risk behavior elicitation, we develop an empirical model to evaluate the implication of risk preferences on farm portfolio decisions. With a comprehensive household level panel data of rounds of 2004 and 2009, we estimate risk aversion behavior of farm households in uncertain climate and market imperfections. To solve the problem of endogeneity, the risk parameter is instrumented in a two stage maximum likelihood estimation technique, and used as a determinant of the level of farm level diversification. We find that farmers with higher level of relative risk premium will more likely opt for diversified farms. The engagement of farm households to off and non-farm income generating activities could likely reduce the on-farm diversification level. On-farm diversification and engagement in off-farm and non-farm activities can be considered as substitutable risk mitigation strategies
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Ayenew, H.Y. & Sauer, J. & Abate-Kassa, G., 2016. "Exposure to Risk and Risk Management in Smallholder Agriculture," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 51, March.
    • Handle: RePEc:ags:gewipr:262076
    DOI: 10.22004/ag.econ.262076
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/262076/files/Bd51Nr23.pdf
    Download Restriction: no
    File URL: https://ageconsearch.umn.edu/record/262076/files/Bd51Nr23.pdf?subformat=pdfa
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.262076?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hadush, Muuz, 2018. "Impact of improved animal feeding practice on milk production, consumption and animal market participation in Tigrai, Ethiopia," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 276473, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:gewipr:262076. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/gewisea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.