IDEAS home Printed from https://ideas.repec.org/a/spr/jsecdv/v26y2024i3d10.1007_s40847-023-00292-7.html
   My bibliography  Save this article

Higher-order risk preferences and livelihood choices of farmers from West Bengal, India

Author

Listed:
  • Kanchan Joshi

    (Macquarie University)

  • Thiagu Ranganathan

    (Centre for Development Studies)

Abstract

This paper investigates the relationship between livelihood diversification strategies and risk preferences, including risk aversion, loss aversion, and higher-order risk preferences of farmers from West Bengal, India, using multivariate regression (mvreg) and multivariate probit (mvp) models. We use data from lottery choice experiments and household surveys to estimate higher-order risk preferences and analyse the relationship between risk preferences and livelihood diversification (N = 191). We found that many sampled households take up other supplementary income-generating activities besides agriculture and allied activities to spread their risk. Farmers who are risk averse are more likely to receive income from remittances and entrepreneurial activities. Higher prudence is linked with higher income contribution from agricultural activities, but a lower income contribution from migration-related activities and non-migratory casual labour. Temperate individuals are more likely to generate a higher share of income from agriculture-related activities and non-migratory casual labour, but a lower share from remittances. Higher-order risk preferences—prudence and temperance—affect livelihood diversification significantly.

Suggested Citation

  • Kanchan Joshi & Thiagu Ranganathan, 2024. "Higher-order risk preferences and livelihood choices of farmers from West Bengal, India," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 26(3), pages 862-887, December.
    • Handle: RePEc:spr:jsecdv:v:26:y:2024:i:3:d:10.1007_s40847-023-00292-7
    DOI: 10.1007/s40847-023-00292-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40847-023-00292-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40847-023-00292-7?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Livelihood diversification; Risk preferences; Prudence; Temperance; Experiments; Indian farmers;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

    Statistics

    Access and download statistics

    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:spr:jsecdv:v:26:y:2024:i:3:d:10.1007_s40847-023-00292-7. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.