The study aims at studying the influence of risk attitudes on the investment of inorganic fertilizers to maize farmers in Tanzania. A survey, focus group discussion and risk game with pay offs were performed to maize farmers in 25 maize growing districts of Southern and Northern highlands of Tanzania.
Cross sectional data on farmersâ€™ and farmsâ€™ characteristics, risk attitudes from an Agronomic Panel Survey (APS) of 2016/2017 was collected from 583 households, randomly selected within a spatial sampling frame.
The results from APS hypothetical question showed minor differences in percentage of maize farmers under least risk averse (34.29%) and most risk averse (38.39%) categories. Indicating that, maize farmers in the study region are moderately risk averse. However, Kilimanjaro and Ruvuma regions observed to have high percentage of farmers in least risk-averse category, whereas high percentage of most risk averse farmers was found in Ruvuma region. Results from risk game for two districts within the study area revealed about half of farmers being least risk averse (46.15%) as compared to less and more risk averse classes.
Gender made no significant difference on risk aversion classes, whereas differences in age of household heads in APS question was statistically significant to risk classes at p<0.05, Chi square test.
Multiple linear regression results revealed that, risk attitudes, regions and economic characteristics have influence on the investment of inorganic fertilizer. Thus, the model comprising risk attitudes, geographical factors and household characteristics, should be considered in studying farmersâ€™ decisions on expenditure of new technologies to improve crop production and farmersâ€™ livelihoods.
Keywords: risk aversion, risk classes, maize smallholders.