Attitude towards Risk and Production Decision: An Empirical analysis on French private forest owners
AbstractThis paper deals with the forest owner's attitude towards risk and the harvesting decision in several ways. First, we propose to characterize and quantify the forest owner's attitude towards risk. Second, we analyze the determinants of the forest owner's risk attitude. Finally, we determine the impact of the forest owner's risk attitude on the harvesting decision. The French forest owner's risk attitude is tackled by implementing a questionnaire, including a context-free measure borrowed from experimental economics. The determinants of the forest owner's risk attitude and harvesting decision are estimated through a recursive bivariate ordered probit model. We show that French forest owners are characterized by a relative risk aversion coefficient close to 1. In addition, we found that the forest owner's risk aversion is influenced positively and significantly by gender (female), age, and willingness to protect the environment, while the percentage of forest income in the total patrimony of the forest owner has a negative effect. Finally, we obtain that the forest owner's risk aversion positively and significantly impacts the harvesting decision.
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Bibliographic InfoPaper provided by HAL in its series Working Papers with number halshs-01005200.
Date of creation: 12 Jun 2014
Date of revision:
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Forest owner's risk attitude; Risk aversion; Harvesting decision.;
Other versions of this item:
- Marielle Brunette & Jérôme Foncel & Nazindigouba Eric Kéré, 2014. "Attitude towards Risk and Production Decision: An Empirical analysis on French private forest owners," Working Papers halshs-00981350, HAL.
- Eric Nazindigouba KERE & Marielle BRUNETTE & Jérôme FONCEL, . "Attitude towards Risk and Production Decision: An Empirical analysis on French private forest owners," Working Papers 201410, CERDI.
- Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-AGR-2014-06-22 (Agricultural Economics)
- NEP-ALL-2014-06-22 (All new papers)
- NEP-ENV-2014-06-22 (Environmental Economics)
- NEP-UPT-2014-06-22 (Utility Models & Prospect Theory)
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