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Effect of Poverty on Risk Attitude of Rural Women Investors in Osun State, Nigeria


MO Adewumi
OE Ayinde
GB Olatunji
FF Ajayi

Abstract

In investments, profit is the main reward for risk bearing. A riskless business may promote poverty. Poverty influences the capacities and willingness to acquire new knowledge and apply new technologies. This study sought mainly to determine the effect of poverty on risk attitude of rural women investors. The study area was Osun state. A three stage sampling technique was used for selection of respondents. Data were generated from both primary and secondary sources. Structured questionnaire was the main tool used to collect primary data for the study. Data collected from 75 respondents were analyzed using descriptive statistics, the Foster Greer Thorbecke poverty measures, the Multi item scale and multinomial logit regression analysis. Result showed that 58.67% of the respondents were poor and the depth and extent of poverty is 19.53% using the international US$1 per day per person as poverty line. Furthermore, the study revealed that, 50.6% of the respondents were risk averse, 38.7% were risk preferring while 10.7% were risk neutral. Further analysis showed that age and level of poverty were major determinants of risk attitudes. Any attempt to insure the women investors’ business should take account of the poverty levels and age of these women.

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