A PORTFOLIO MODEL FOR EVALUATING RISK IN ECONOMIC DEVELOPMENT PROJECTS,WITH AN APPLICATION TO AGRICULTURE IN NIGER

After a literature review, a planning and project evaluation model is developed that includes both risk and profit considerations but avoids some weaknesses of other mean-variance models. Agricultural extension and project evaluation results of an application of this model are compared to those of the common profit-maximisation model. The two sets of results differ on the worth of intercropping, the relative merits of raising small ruminants and cattle, the likelihood of success of a major livestock development programme (which would benefit only wealthier farmers), the benefits of introducing labour-saving technologies, and the value of teaching/demonstration components in the projects being evaluated.