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Risk Aversion And Pesticide Use: Further Insights From Prospect Theory

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  • Carpentier, Alain

Abstract

Prospect Theory suggests that farmers’ attitudes toward pest risks depend on the situation they refer to when facing crop protection decisions. Farmers referring to the ‘protected crop’ situation may implement self-insurance pesticide treatments while farmers referring to the ‘unprotected crop’ situation are risk neutral toward pest risks. Importantly, farmers are more likely to refer to the ‘protected crop’ situation when pesticides are relatively inexpensive. This in turn leads to original results related to the regulation of agricultural pesticide uses. For instance, pesticide taxes would not only impact pesticide expected profitability but also farmers’ attitude toward pest risks.

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  • Carpentier, Alain, 2017. "Risk Aversion And Pesticide Use: Further Insights From Prospect Theory," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261265, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae17:261265
    DOI: 10.22004/ag.econ.261265
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    References listed on IDEAS

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