Document Type

Working Paper

Date of this Version

2011

Abstract

How does one measure financial risk aversion for a rural individual that has no
knowledge of financial products? What household variables influence financial risk aversion? To answer this question, this study implemented Biswanger’s Lottery with an added gains and losses competent, in a series of six games, on a sample of 45 individuals drawn from two villages in rural India. For each participant, information on net wealth, net income, occupation and gender
was recorded.

The overall distribution of risk class was primarily intermediate risk aversion, followed by severe and moderate risk aversion. While the effect of gender was significant, its relationship with risk aversion was nonlinear. Similarly, the paradoxical behavior of the landless laborer was highlighted and discussed.

Keywords

financial risk aversion, rural India

Included in

Business Commons

Share

COinS
 

Date Posted: 04 April 2012

 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.