Ambiguity Aversion and Portfolio Choice in Small-Scale Peruvian Farming

@inproceedings{EngleWarnick2008AmbiguityAA,
  title={Ambiguity Aversion and Portfolio Choice in Small-Scale Peruvian Farming},
  author={Jim Engle-Warnick and Sonia Laszlo},
  year={2008}
}
While the effect of risk aversion on farmers’ decision-making has long been documented, far less is known about the effect of ambiguity aversion. We argue that ambiguity aversion is just as relevant to their decision-making process because they are uncertain about the yield distributions generated by available technologies. By experimentally measuring risk and ambiguity aversion in rural Peru, we provide new evidence on the role of ambiguity aversion on farm decisions in developing countries… CONTINUE READING