Risk Preferences and Risk Perceptions among Smallholder Maize Farmers in Tanzania: Evidence from a Framed Field Experiment

Abstract

The information on risk preferences and risk perceptions among maize farmers in maize highly growing highlands is limited. Similarly, relationships between socio-demographic factors and risk preferences are not clearly explored. A risk game with pay-offs and a hypothetical scenario in a survey questionnaire were performed to assess the risk preferences of maize farmers in maize-growing regions of the Southern and Northern highlands of Tanzania. Risk ranking was executed during focus group discussions and revealed that risk perceptions of maize farmers varied across gender and location. Cross-sectional data on farmers’ and farms’ characteristics including risk scenarios from an Agronomic Panel Survey (APS) of the 2016/2017 growing season was collected from 560 Household Heads (HHs), randomly selected within a spatial sampling frame. The study recommends the inclusion of risk preferences and risk perceptions status of farmers in policy-making and the introduction of new agricultural technologies in order to foster a high adoption rate and advancement of agricultural development.