The Effect of Ambiguous Risk and Coordination on Farmer´s Adaptation to Climate Change-A Framed Field Experiment

central america | Agriculture Climate change

The Effect of Ambiguous Risk and Coordination on Farmer´s Adaptation to Climate Change-A Framed Field Experiment

The risk of losses of income and productive means due to adverse weather can differ significantly among farmers sharing a productive landscape, and is of course hard to estimate, or even “guesstimate” empirically. Moreover, the costs associated with investments in reduced vulnerability to climatic events are likely to exhibit economies of scope. We explore the implications of these characteristics on farmer's decisions to adapt to climate change using a framed field experiment applied to coffee farmers in Costa Rica. As expected, we find high levels of risk aversion, but even using that as a baseline, we further find that farmers behave even more cautiously when the setting is characterized by unknown or ambiguous risk (i.e. poor or non-reliable risk information). Secondly, we find that farmers, to a large extent, coordinated their decisions to secure a lower adaptation cost, and that communication among farmers strongly facilitated coordination.

EfD Authors

Dr. Francisco Alpízar Director and Senior Research Fellow
Professor Fredrik Carlsson Research Fellow
MSc. Maria Angelica Naranjo Deputy Director and Research Fellow

Keywords

Centers

central america

Type of publication

Peer reviewed

Reference

Alpizar, F., F. Carlsson and M.A. Naranjo. (2011). The Effect of Ambiguous Risk and Coordination on Farmer´s Adaptation to Climate Change-A Framed Field Experiment. Ecological Economics, Vol 70:12, pp.2317-2326.

Environment for Development

Environment for Development