Are peasants risk-averse decision makers?

For decades, researchers studying small-scale, subsistence-oriented farmers have sought to explain why these "peasants" seem slow to acquire new technologies, novel agricultural practices, and new ideas from the larger societies that have engulfed them. The early work on this question suggested that this "cultural conservatism" resulted from things like a rigid adherence to tradition or custom, a cognitive orientation toward a "limited good," or ignorance and lack of education. In response to such explanations, much of the subsequent debate on this issue has focused on showing that this seeming conservatism actually results from rational cost benefit analysis in which individuals make risk-averse decisions because of their uncertain and precarious economic situations. To inform this approach, we have combined comparative experimental field studies with economically oriented ethnography among two groups of small-scale farmers, the Mapuche of Chile and the Sangu of Tanzania. Our experiments, which were designed to measure risk preferences directly, indicate that both the Mapuche and Sangu are risk-preferring (not risk-averse) decision makers in the standard economic sense--suggesting that subsistence farmers more generally may not be risk-averse either. Furthermore, while sex, age, land holdings, and income do not predict risk preferences and wealth is "at most" only marginally predictive, what does seem to predict risk preferences in our monetary gambles "cultural group." Although such experimental findings carry important caveats, they suggest that standard views of risk-averse decision making may not be the best theoretical tools for understanding "peasant conservatism" or the behavioral patterns often attributed to "rational risk aversion.