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Abstract

In this paper, we analyze risk and time preferences as factors related to technology adoption. In the context of West African small-scale cattle farm households, we examine why the adoption of prophylactic drugs as an ex-ante risk management strategy to protect cattle from tsetse-transmitted African Animal Trypanosomosis (AAT) despite experts recommendation is low. To do so, we conducted two types of economic field experiments: (i) to elicit farmers risk and time preferences, considering additional behavioral information beyond standard economic theory and (ii) to observe farmers adoption decision of alternative drug treatments to manage the risk of AAT. Results show that loss aversion and high discount rates are associated with low prophylaxis take-up. More specifically, farmers value losses of animals that are infected with AAT larger than gains from healthy animals and short-term benefits from therapeutic treatment over long-term benefits from prophylactic treatment. As a consequence, a loss averse and impatient farmer that is less likely to apply AAT prophylaxis forgives chances of higher and sustainable returns, thereby deteriorates risk management abilities and likely perpetuates poverty. We suggest that the consideration of farmers risk and time preferences can help improving the effectiveness of livestock extension and veterinary services in West Africa. Acknowledgement : This work was supported by the German Research Foundation (DFG) [grant number WA 1002/8-1].

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