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Assessing Farmers' Attitudes Toward Risk Using The "Closing-In" Method

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  • Bard, Sharon K.
  • Barry, Peter J.

Abstract

The 1996 Farm Bill and low commodity prices have regenerated interest in the impact of risk and farmers' risk attitudes on production agriculture. Previous research has used expected utility theory (EUT) and direct elicitation of utility functions (DEU) for eliciting risk attitudes. To overcome the criticism of EUT and DEU, a recently developed technique called the "closing in" method is adapted for eliciting farmers' risk attitudes. This method is applied to Illinois farmers by using a computerized decision procedure, and is validated by comparing the results to the farmers' self-assessment of their risk attitudes and score to a risk attitudinal scale.

Suggested Citation

  • Bard, Sharon K. & Barry, Peter J., 2001. "Assessing Farmers' Attitudes Toward Risk Using The "Closing-In" Method," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(1), pages 1-13, July.
    • Handle: RePEc:ags:jlaare:31153
    DOI: 10.22004/ag.econ.31153
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    3. Fausti, Scott W. & Gillespie, Jeffrey M., 2006. "Measuring risk attitude of agricultural producers using a mail survey: how consistent are the methods?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(2), pages 1-18, June.
    4. Lagerkvist, Carl Johan, 2005. "Assessing farmers' risk attitudes based on economic, social, personal, and environmental sources of risk: evidence from Sweden," 2005 Annual meeting, July 24-27, Providence, RI 19361, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Kassu Wamisho Hossiso & Aaron Laporte & David Ripplinger, 2017. "The Effects of Contract Mechanism Design and Risk Preferences on Biomass Supply for Ethanol Production," Agribusiness, John Wiley & Sons, Ltd., vol. 33(3), pages 339-357, June.

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