Determinants of the risk attitude of indigenous chicken farmers and the effect of risk attitude on indigenous chicken productivity in Kenya

Abstract

Indigenous Chicken (IC) keeping in Kenya is predominantly based on an extensive system that is characterized by high mortality rates, resulting mainly from disease outbreaks and predation. Information on farmers’ risk attitudes is scarce despite the risks inherent in IC production systems. Similarly, it is unclear how socioeconomic factors influence IC farmers’ risk attitudes and how their risk attitudes influence IC productivity. As a result, an understanding of the determinants of farmers’ risk attitude and the effects of risk attitude on IC productivity are critical. Primary data were collected using a structured questionnaire. Multi-stage sampling procedure was used to sample 240 IC farmers from an accessible population of 598 chicken farmers in Nyanza region. Ordinary least squares regression analysis was carried out to determine the influence of the socio-economic variables on the risk attitudes of the IC farmers, and a two-stage least squares regression analysis was used to determine the effect of risk attitude on IC productivity. Total land size, family size, occupation of the farmer, and total household expenditure had a positive and significant influence on the risk aversion behavior of the farmers. Farming experience, number of chickens, and cost of depreciation had a negative impact on risk aversion. The risk aversion coefficient had a negative and significant relationship with chicken productivity. Farmers’ risk attitude and socioeconomic characteristics should be considered part of the guide to formulating and implementing policy on risk management.