Abstract
The relationship between economic welfare and general risk attitude is examined using a three-wave data set collected from 588 ethnically diverse households in Central Vietnam. Ethnic minorities account for about 30 % of the sample and include twelve different ethnic groups. Multivariate analysis is applied with single equation and equation-system estimating approaches. The results confirm that the ethnic majority (Kinh) are wealthier while willingly taking more risk, roughly one point higher on the 11-point Likert scale, compared to the ethnic minority. Risk attitudes and economic welfare are determined differently between the two groups, as minorities are more vulnerable to their socio-demographic characteristics, resources, and locations, which are more beneficial to the Kinh. Stronger risk-taking is positively associated with a better economic well-being among the ethnic majority, whereas this association is not found among extremely risk-averse ethnic minority. Findings of this study suggest that development policies should offer different treatments tailored to specific needs based on socio-demographic and cultural backgrounds including attitudes toward risks.
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