Evaluating producer preferences and information processing strategies for drought risk management tools in Bangladesh. (September 2019)

• Record Type: Journal Article
• Authors: Ortega, David L.; Ward, Patrick S.; Caputo, Vincenzina
• Is Part Of: World development perspectives. Number 15(2019)
• Publication Date: 2019-09
• Subjects: Equality constrained latent class model -- Attribute non-attendance -- Discrete choice experiment -- Insurance -- Drought-tolerant rice -- Bangladesh; Economic development -- Evaluation -- Periodicals; Economic assistance -- Evaluation -- Developing countries -- Periodicals; Developing countries -- Economic conditions -- Periodicals; 338.9105
• DOI: 10.1016/j.wdp.2019.100132
• Languages: English
• ISSNs: 2452-2929

Abstract

Abstract: We use stated preference data to study farmers' preferences for two alternative strategies to manage drought risks in Bangladesh. A choice experiment on drought tolerant rice varieties and weather index insurance was administered to 2306 farmers. Two overarching preference classes or meso-groups were identified using an equality constrained latent class model, each containing various patterns of attribute non-attendance. Our analysis finds that farmers rely on information processing strategies to simplify risk management tool decisions to mitigate drought risk. Differences in the use of farm inputs, and access to savings mechanisms, both formal and informal, are shown to affect decision making.