Risk Aversion By Small Farmers- Can It Be Measured ?results Of A Survey Of 69 Small Farmers In Kabare Location, Kirinyaga District, March 1977
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Date
1977-06Author
Fisher, Patricia M
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
Small farmers in developing countries have to contend
with many risks. One of the most important is the risk of less
than adequate rainfall. Risk aversion by farmers can be a
constraint on the transition from a subsistence. to a cash economy.
This paper describes a survey of small farmers in Kabare
Location, Kirinyaga District, Kenya which was conducted during
March,1977. Results of the survey were used to attempt to
measure the farmers' risk aversion. An index of risk aversion
was constructed and used to test hypotheses concerning the characteristics
of more and less risk averse farmers. The area of
the survey fell into three distinct ecological zones, and the most
significant result was the striking interzonal difference in
mean values of the index of risk aversion, with farmers in the
lower zones being progressively more risk averse. Other results
were that
(a) In the upper zone, farmers with a smaller regular workforce
tended to be more risk averse. This was also true to
a lesser extent in the middle zone.
(b) In the middle zone, farmers who had attended Farmers'
Training Centres were less risk averse. Also farmers on
divided farms were less risk averse.
(c) In the lower zone, farmers who had attended other
training apart from at school or Farmers' Training Centre
were mere risk averse. Also farmers who grew a high proportion
of mixed crops were less risk averse.
Risk aversion seemed to play a more important part in
decision-making in the lower two zones. In the upper zone, the
farming was more commercial, and there was little rainfall risk.
It is hoped to refine the technique of constructing the
index of risk aversion9 and that it may be useful in future research
in agriculture in developing countries.
Some implications of the study f'or policy decisions are
discussed.
Citation
Master of Arts in Economics. June, 1977Publisher
University of Nairobi, Departatent of Economics, University of Nairobi,