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Abstract

Fake or substandard fertilizer is a growing concern in many countries. Even in places not affected by fertilizer quality problems, uncertainty could arise due to doubts about the effectiveness of fertilizer in general. Past literature has examined the impact of risk preferences on fertilizer use intensity. We build upon this literature by showing theoretically and empirically that the marginal effect might not be the same for farmers of different wealth levels. In our study area in northwestern Vietnam, low wealth farmers reduce their fertilizer intensity when their risk aversion increases. The marginal effect for high wealth farmers is insignificant.

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