Completed research projects

(since 2010)

Long-term effects of risk and time preferences on households’ welfare in emerging market economies


Economic theory suggests that risk aversion and time discounting should decline in wealth. As a conclusion, poorer households, especially in developing countries, are considered to be more risk averse and more impatient than wealthier households, which in turn lead the poorer to take management decisions that could perpetuate their lives in poverty. However, our understanding of the complex and dynamic interactions between risk and time preferences, risk management and poverty, especially in different dimensions of well-being, is still quite limited, because of data limitations and highly compartmentalized research methods.

This research project applies a holistic approach, where the dynamic interrelations between risk and time preferences, risk management and the multiple dimensions of poverty will be disentangled in order to derive longer-term prospects for sustainable development of rural households in transition economies.

The emerging market economy of Thailand, which has seen a considerable decline in poverty but remains strongly vulnerable to adverse risks, is a suitable stage to effectively investigate the dynamic interactions between preferences, risk management and poverty.

The research project investigates these interactions by differentiating between two levels of risk management strategies, i.e. (i) risk management at the individual level such as diversifying income sources, and (ii) risk management at the group level such as sharing risks with other households in social networks. Drivers and impacts of risk management strategies at both levels are the objects of investigation. The investigation of drivers of risk management decisions will go beyond standard economic theory and incorporate alternative theories such as prospect theory and quasi-hyperbolic discounting. Among the impacts of risk management strategies, both monetary indicators and non-monetary indicators of well-being will be taken into account.

Methodology The empirical foundations for the research are built upon the existing long-term panel data set of approximately 2000 households from rural Thailand over 5 waves from 2007 to 2013 collected within the scope of the DFG-FOR 756 project. In the proposed research the existing data base will be complemented by economic field experiments to elicit risk and time preferences and by collecting information on households’ social networks. With the extended long-term panel database our understanding of the dynamic interlinkages between risk and time preferences, risk management and multidimensional poverty can be significantly improved.
Contact Sabine Liebenehm
PartnersDIW Berlin; Kasetsart University, Bangkok
Period 2016-2019
Funding/ Sponsor DFG – Project No 2930/1-1
Budget300 000 €
KeywordsRisk and time preferences, Risk management, Poverty, Thailand

Individual risk attitudes in rural Thailand and Vietnam

Objectives This project aims for generating a better understanding of the role of individual risk attitude in explaining economic behaviour of poor households as a pre-requisite for empirical research to build up a considerable database serving the specific needs of research.
The project has four objectives, namely: (1) to validate various measures of individual risk attitude in the cross-section, (2) to generate understanding about the determinants of risk attitude in the time-series, (3) to analyze the influence of financial literacy, and (4) to analyze the role of risk attitude of agricultural decision makers together with their past experience and their level of knowledge on management decisions in agriculture.
MethodologyA representative household survey in rural areas of Thailand and Vietnam will be conducted.
The resulting database provides comprehensive information about characteristics of these households, including about all kinds of shocks and risks and the respondent individual risk attitudes.
ContactHermann Waibel, Sabine Liebenehm in collaboration with Lukas Menkhoff (DIW)

10/2013 - 02/2018
(including no cost extension)
Funding/ Sponsor DFG - Proj. WA 1002/10-1
Budget184 000 €
KeywordsPoverty dynamics, Sustainable development, Vulnerability, Southeast Asia, Thailand, Vietnam

Status of markets for organic and fair trade commodities in agriculture and its impact for developing countries: A meta-analysis


Overall objectives: To assess the extent to which certified alternative agricultural systems like organic agriculture and fair trade management can contribute towards sustainable livelihoods of smallholder farmers in developing countries.

Specific objectives:

  • To examine the drivers that influence the adoption of such alternative farming systems;
  • To investigate the extent to which organic and fair trade certified agriculture impacts production and welfare of smallholder farmers;
  • To compare and do a meta-analysis on how these systems effects smallholder farmers in the continents on Asia, Africa and Latin America and derive the success factors of such farming technologies.
MethodologyEconometric and meta-analysis based on secondary and primary data.
ContactPriyanka Parvathi
Funding/ Sponsor Wege in the Forschung II, Leibniz Universität Hannover
Budget50 000 €
KeywordsOrganic farming, fair trade, developing countries, meta-analysis

Improving the management of trypanosomiasis in smallholder livestock production systems in tsetse-infested sub-Saharan Africa


Overall objectives:
To improve the sustainable livelihoods of resource-poor livestock producers in smallholder production systems through improved control of trypanosomiasis.

Special objectives:

  • To improve capacity and capability of African laboratories and veterinary services to detect trypanocide resistance  and to conduct quality control of trypanocidal drugs;
  • To improve the effectiveness of available trypanocides in livestock;
  • To promote and monitor the use of the technical and structural innovations developed in partnership at a regional and continental scale.
MethodologyIn order to evaluate the project’s impact
1. Household level data collection to establish a panel data set
2. Impact analysis using DD-models
ContactSabine Liebenehm / Alirah E. Weyori
PartnersPrince Leopold Institute of Tropical Medicine, Antwerp (ITM)
Free University of Berlin (FUB)
Vétérinaires Sans Frontières – Belgium (VSF)
Centre International de Recherche-Developpement sur l’Elevage en Zone Subhumide (CIRDES)
National Animal Health Diagnostic and Investigation Centre (NAHDIC)
University of Pretoria (UP)
Direction de l’Elevage du Togo (VetTogo)
Universidade Eduardo Mondlane (EMU)
Period2012 - 2017
Funding/ Sponsor EU Commission
Budget330 000 €
KeywordsImpact assessment, Livestock disease, Sub-Saharan Africa

Insurance and Private Transfers – Experimental Evidence

ObjectivesMost people in developing countries are currently not insured; they therefore depend on private transfers from relatives and friends when hit by a shock. However, the provision of insurance is steadily increasing. An important question is to what extent the possibility to purchase insurance affects the willingness to help others. Previous research shows contradicting effects: some studies find a decrease in private transfers, others an increase. The underlying drivers remain unclear. Guided by the literature on other-regarding preferences, the proposed project investigates potential mechanisms that may help explain changes in helping behavior.
MethodologyWe analyze these mechanisms in a framed field experiment combined with a household survey on transfer behavior within social networks. We conduct the project in several villages in Cambodia.
ContactSusan Steiner / Friederike Lenel (DIW Berlin)
PartnersSocial Health Protection Association, Cambodia
Funding/ Sponsor DFG
Budget91 000 €
KeywordsSocial networks, insurance, experiments, Cambodia

Sustainable rubber cultivation in the Mekong region (SURUMER), sub-project 9: Microeconomic analysis of sustainable Natural Resources Management innovations in rubber cultivation in Yunnan Province, China

ObjectivesThe main objective of this project is to establish a better understanding of the potential to introduce a sustainable rubber plantation system in Yunnan province in Southwestern China. To achieve this objective an ex-ante impact analysis of sustainable Natural Resource Management (NRM) innovations of farmers in this area will be carried out.

Specific objectives:
1. Analyze different adoption decisions by using econometric models to identify key factors that drive smallholder rubber farmer’s decision.
2. Conduct a comprehensive economic analysis of different farming systems (rubber monoculture, intercropping, traditional agriculture), giving account of the cost structures, productivity, cash income generation and poverty levels.
3. Conduct an economic impact assessment by use of a “difference-in-difference model” and “normative household models” based on the concept of typical farms.
4. Investigate the potential economic effects of alternative land use strategies in terms of income generation, income inequality, food security, and poverty and vulnerability reduction.
5. Analyze the barriers and required incentives for small-scale farmers to adopt economically sustainable land use and management concepts.

MethodologyCollect a representative household (or farm) level panel survey of around 600 households;
Conduct empirical analysis by using econometric models and collected data 
ContactShi Min, Shaoze Jin
PartnersCenter for Chinese Agricultural Policy,
Chinese Academy of Sciences
Funding/ Sponsor BMBF, DLR
Budget310 000 €
KeywordsNatural Rubber, Microeconomic analysis, Mekong region, Xishuangbanna, China

Impact of shocks on the vulnerability to poverty: consequences for development of emerging Southeast Asian economies

Teilprojekt TP 03
The capacity of agriculture to adjust to economic crisis and environmental shocks in Thailand
1. Investigating the changing role of agriculture before and after economic crisis in Thailand
2. Analyzing the capacity of agriculture to adjust to environmental shocks in Vietnam
3. Comparing and assessing the structural adjustment processes in agriculture in Thailand and Vietnam in view of economic crisis and environmental change
4. Contribute to advancing the vulnerability concepts by incorporating agricultural household decision models
5. Advance the concept of risk measurement
Methodology 1. Household level data collection to establish a panel data set
2. Quantitative analysis using panel data models
ContactMulubrhan R. Amare, Bezawit B. Chichaibelu, Lena Hohfeld, Thi Hoa Pahlisch
PartnersDas Projekt wird gemeinsam mit dem Lehrstuhl 'Umweltökonomik und Welthandel' (Prof. U. Grote) bearbeitet.
Funding/ Sponsor DFG
Budget250 000 €
KeywordsVulnerability, Shocks, Thailand, Coping strategies, Rural development

Cost-benefit analysis of sustainability standards in small holder oil palm farming in Sumatra, Indonesia

ObjectivesThis research aims to assess the acceptance and economic consequences of standards for sustainable oil palm farming among small holders in the province of Jambi, Sumatra, Indonesia.
This study will draw from an existing panel data set of some 291 small holder oil palm farmers from 2010 and 2012 in two districts of Jambi.
Three hypotheses will be tested:
(1) smallholder oil palm farmers are aware of the environmental standards promoted by the Government in oil palm plantations;
(2) the benefits of sustainable oil palm management practices are uncertain;
(3) woman can play a major role in implementing sustainable oil palm management practices.
Fieldwork to test the first hypotheses has already been conducted during July - August 2012.
For 2013, additional data collection is proposed with the objective to test the second and the third hypotheses. Individual interviews, focus group discussions with village groups and a stakeholder workshop will be conducted to establish the empirical base for developing and applying cost benefit analysis.
MethodologyHousehold level data collection to establish a panel data set
Funding/ Sponsor Economy and Environment Program for Southeast Asia (EEPSEA), Institut für Entwicklungs- und Agrarökonomik
Budget14 000 €
KeywordsOil palm, Environment, Smallholder, Indonesia

Economics of African Animal Trypanosomiasis (AAT) management strategies under risk and time preferencies

ObjectivesThe overall goal of this research proposal is to analyze livestock disease control options that can ensure the sustainability of livestock dependent household systems in West Africa.
The research project has two specific objectives, i.e.:
(i) Analyse the data on risk and time preferences as well as subjective probabilities that have been elicited by economic field experiments from January to February 2011
(ii) Assess the long-term productivity of AAT disease control strategies including trypanocides in a dynamic modeling framework
MethodologyMaximum-Likelihood Estimation of preferences
Stochastic dynamic programming
ContactSabine Liebenehm
Funding/ Sponsor DFG
Budget110 000 €

Assessing the Potential of Fair Organic Certified Products for Sustainable Livelihoods in Developing Countries - The case of Black Pepper in India

Objectives1. To what extent conversion and adoption to organic production and fair trade marketing arrangements can be a viable option for improving the livelihoods of smallholder farmers in India?
2. What is the impact of organic agriculture under fair trade promotion structures on the income and consumption of the household?
Methodology1. Household level data collection to establish a panel data set
2. Quantitative analysis using panel data models
ContactPriyanka Parvathi
Funding/ Sponsor Leibniz Universität Hannover
KeywordsOrganic farming, Fair trade, Sustainability, Vulnerability, India