Hostname: page-component-78c5997874-t5tsf Total loading time: 0 Render date: 2024-11-10T11:01:34.420Z Has data issue: false hasContentIssue false
  • English
  • Français

Risk Attitudes and Farm/Producer Attributes: A Case Study of Texas Coastal Bend Grain Sorghum Producers

Published online by Cambridge University Press:  05 September 2016

S. Sri Ramaratnam ,
M. Edward Rister ,
David A. Bessler  and
James Novak
S. Sri Ramaratnam
Affiliation:
Department of Agricultural Economics, Virginia Polytechnic Institute and State University
M. Edward Rister
Affiliation:
Texas Agricultural Experiment Station and the Department of Agricultural Economics, Texas A & M University
David A. Bessler
Affiliation:
Texas Agricultural Experiment Station and the Department of Agricultural Economics, Texas A & M University
James Novak
Affiliation:
Alabama Cooperative Extension Service, Auburn University
Get access Rights & Permissions [Opens in a new window]

Abstract

An analysis of risk attitudes for a sample of grain sorghum producers in the Texas Coastal Bend is reported. Four alternative functional forms were estimated on data elicited by the direct elicitation of utility approach. The exponential functional form described most producers' utility preferences better than other utility forms. Relationships between exponential risk measures and both producer attributes and farm characteristics, including interactions among them, were identified as significant. Risk aversion was found to diminish with more experience in farming and to increase with more leasing of farm land. Risk aversion was also found to decline with larger farm size and to increase with higher dependency of farm operators on farm income.

Keywords

direct elicitationBernoullian utilityrisk aversiongrain sorghum
Type
Submitted Articles
Information
Journal of Agricultural and Applied Economics , Volume 18 , Issue 2 , December 1986 , pp. 85 - 96
Copyright
Copyright © Southern Agricultural Economics Association 1986

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Anderson, J. R. “Perspectives on Models of Uncertain Decisions.” Risk, Uncertainty, and Agricultural Development. New York: Agricultural Development Council, 1979.Google Scholar
Anderson, J. R., Dillon, J. L., and Hardaker, J. B.. Agricultural Decision Analysis. Ames, Iowa, Iowa University Press, 1977.Google Scholar
Attanasi, E. D..and Karlinger, M. R.. “Risk Preferences and Flood Insurance.” Amer. J. Agr. Econ., 61,3(1979):490–495.Google Scholar
Binswanger, H. “Attitudes Toward Risk: Experimental Measurement in Rural India.” Amer. J. Agr. Econ., 62,3(1980):395–407.Google Scholar
Buccola, Steven T. “Specification of Bernoullian Utility Function in Decision Analysis: Comment.” Agr. Econ. Res., 34, 1(1982a):19–21.Google Scholar
Buccola, Steven T.. “Portfolio Selection Under Exponential and Quadratic Utility.” West. J. Agr. Econ., 7, 1 (1982b):43–51.Google Scholar
Buccola, Steven T. and French, Ben C.. “Estimating Exponential Utility Functions.” Agr. Econ. Res., 30,1(1978):37–43.Google Scholar
Dillon, J. L. “An Expository Review of Bernoullian Decision Theory in Agriculture: Is Utility Futility?” Rev. Mktg. Agr. Econ., 39,1(1971):3–80.Google Scholar
Dillon, J. L. and Scandizzo, P.. “Risk Attitudes of Subsistence Farmers in North-East Brazil: A Sampling Approach.” Amer. J. Agr. Econ., 60,3(1978):425–435.Google Scholar
Friedman, M. and Savage, L. J.. “The Utility Analysis of Choices Involving Risk.” J. Pol. Econ., 56,4(1948):279–304.Google Scholar
Gallant, A. R. “Unbiased Determination of Production Technologies.” J. Econometrics, 20, 2(1982):285–323.Google Scholar
Halter, A. N. and Dean, G. W.. Decisions Under Uncertainty with Research Applications. Cincinnati: South Western Publishing Co., 1971.Google Scholar
Halter, A. N. and Mason, R.. “Utility Measurement for Those Who Need to Know.” West. J. Agr. Econ., 3,1(1978):99–109.Google Scholar
Hanoch, G. and Levy, H.. “Efficient Portfolio Selection with Quadratic and Cubic Utility.” J. Bus., 43,2(1970):181–189.Google Scholar
Hazell, P. B. R. “Application of Risk Preferences in Firm-Household and Agricultural Sector Model.” Amer. J. Agr. Econ., 64,2(1982):384–390.Google Scholar
King, R. P. and Robison, L. J.. “An Interval Approach to the Measurement of Decision Maker Preference.” Amer. J. Agr. Econ., 63,3(1981):510–520.Google Scholar
Lin, W. and Chang, H.. “Specification of Bernoullian Utility Functions in Decision Analysis.” Agr. Econ. Res., 30,1(1978):30–36.Google Scholar
Lin, W., Dean, G., and Moore, C.. “An Empirical Text of Utility Versus Profit Maximization in Agricultural Production.” Amer. J. Agr. Econ., 56,3(1974):497–508.Google Scholar
Love, R. W. “An Empirical Analysis of Intertemporal Stability of Risk Preferences and Their Relations to Farm and Operator Socioeconomic Characteristics.” Unpublished Ph.D. dissertation, Michigan State University, 1982.Google Scholar
Moscardi, E. and de Janvry, A.. “Attitudes Toward Risk Among Peasants: An Econometric Approach.” Amer. J. Agr. Econ., 59,4(1977):710–716.Google Scholar
Officer, R. R. and Halter, A. N.. “Utility Analysis in a Practical Setting.” Amer. J. Agr. Econ., 50, 2(1968):257–277.Google Scholar
Pratt, J. W. “Risk Aversion in the Small and in the Large.” Econometrica, 32,1(1964):122–136.CrossRefGoogle Scholar
Robison, L. J. “An Appraisal of Expected Utility Hypothesis Tests Constructed from Responses to Hypothetical Questions and Experimental Choices.” Amer. J. Agr. Econ., 64,2(1982):367–375.Google Scholar
Robison, L. J., Barry, P. J., Kliebenstein, J. B., and Patrick, G. F.. “Risk Attitudes: Concepts and Measurement Approaches.” on Risk Management in Agriculture. Edited by Barry, Peter J., Iowa State University Press; Ames, Iowa, 1984.Google Scholar
Roumasset, J. A. Rice and Risk: Decision Making Among Low Income Farmers. Amsterdam: North Holland Publishing Co., 1976.Google Scholar
Texas Field Crop Statistics, Texas Department of Agriculture, USDA, 1971–1981.Google Scholar
Von Neumann, J. and Morgenstern, O.. Theory of Games and Economic Behavior, second edition; Princeton, New Jersey: Princeton University Press, (1944), 1947.Google Scholar
Wecker, W. E. and Ansley, C. F.. “The Signal Extraction Approach to Non-Linear Regression and Spline Smoothing.” J. Amer. Stat. Assn., 73,1(1983):81–89.Google Scholar
Wilson, P. N. and Eidman, V. R.. “An Empirical Test of the Interval Approach for Estimating Risk Preferences.” West. J. Agr. Econ., 8,1(1983):170–182.Google Scholar