A structural estimation of French farmers’ risk preferences: an artefactual field experiment
AbstractWe designed an artefactual field experiment involving real payments to elicit French farmers’ risk preferences. We test for two descriptions of farmers’ behaviour: expected utility and cumulative prospect theory and for preference stability across context (price risk and yield risk). We use multiple price lists where farmers make series of choices between two lotteries with varying probabilities and outcomes in the gain and loss domains. We estimate parameters describing farmers’ risk preferences derived from structural models. We find farmers are slightly risk averse in the expected utility framework. In the cumulative prospect theory frame, we find farmers display either loss aversion or probability weighting, tending to overweight small probabilities and to underweight high probabilities. We also estimate the reference point and find it not significantly different from zero. Cumulative prospect theory is a better description of farmers’ risk attitudes. We find risk preferences vary across context.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by INRA UMR SMART in its series Working Papers SMART - LERECO with number 201106.
Length: 17 pages
Date of creation: 2011
Date of revision:
Contact details of provider:
Postal: 4, Allée Adolphe Bobierre, CS 61103, 35011 Rennes Cedex
Web page: http://www.rennes.inra.fr/smart_eng/publications/working_papers
More information through EDIRC
risk attitudes; field experiment; farmer;
Find related papers by JEL classification:
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
This paper has been announced in the following NEP Reports:
- NEP-AGR-2012-06-13 (Agricultural Economics)
- NEP-ALL-2012-06-13 (All new papers)
- NEP-CBE-2012-06-13 (Cognitive & Behavioural Economics)
- NEP-EXP-2012-06-13 (Experimental Economics)
- NEP-UPT-2012-06-13 (Utility Models & Prospect Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Levon Barseghyan & Jeffrey Prince & Joshua C. Teitelbaum, 2011. "Are Risk Preferences Stable across Contexts? Evidence from Insurance Data," American Economic Review, American Economic Association, vol. 101(2), pages 591-631, April.
- Bocqueho, Geraldine & Jacquet, Florence & Reynaud, Arnaud, 2011. "Expected Utility or Prospect Theory Maximizers? Results from a Structural Model based on Field-experiment Data," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114257, European Association of Agricultural Economists.
- Jose Apesteguia & Miguel Ballester, 2009.
"A theory of reference-dependent behavior,"
Springer, vol. 40(3), pages 427-455, September.
- Jose Apesteguia & Miguel A. Ballester, 2007. "A theory of reference-dependent behavior," Economics Working Papers 1056, Department of Economics and Business, Universitat Pompeu Fabra.
- Jose Apesteguia & Miguel A. Ballester, 2007. "A Theory of Reference-Dependent Behavior," Working Papers 323, Barcelona Graduate School of Economics.
- José Apesteguía & Miguel A. Ballester, 2004. "A Theory Of Reference-Dependent Beavior," Documentos de Trabajo - Lan Gaiak Departamento de EconomÃa - Universidad PÃºblica de Navarra 0402, Departamento de Economía - Universidad Pública de Navarra.
- Andersen, Steffen & Harrison, Glenn W. & Lau, Morten Igel & Rutström, Elisabeth E., 2007.
"Behavioral Econometrics for Psychologists,"
18-2007, Copenhagen Business School, Department of Economics.
- Andersen, Steffen & Harrison, Glenn W. & Lau, Morten Igel & Rutström, Elisabet E., 2009. "Behavioral Econometrics for Psychologists," Working Papers 04-2009, Copenhagen Business School, Department of Economics.
- Steffen Andersen & Glenn W. Harrison & Morten Igel Lau & Elisabet E. Rutstroem, 2007. "Behavioral Econometrics for Psychologists," Working Papers 2007_08, Durham University Business School.
- Arnaud Reynaud & Stephane Couture, 2010.
"Stability of Risk Preference Measures: Results From a Field Experiment on French Farmers,"
LERNA Working Papers
10.10.316, LERNA, University of Toulouse.
- Arnaud Reynaud & Stéphane Couture, 2012. "Stability of risk preference measures: results from a field experiment on French farmers," Theory and Decision, Springer, vol. 73(2), pages 203-221, August.
- Couture, Stéphane & Reynaud, Arnaud, 2010. "Stability of Risk Preference Measures: Results from a Field Experiment on French Farmers," TSE Working Papers 10-151, Toulouse School of Economics (TSE).
- Rulon D. Pope, 2003. "Agricultural Risk Analysis: Adequacy of Models, Data, and Issues," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1249-1256.
- Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2010. "Risk and Time Preferences: Linking Experimental and Household Survey Data from Vietnam," American Economic Review, American Economic Association, vol. 100(1), pages 557-71, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anne Chauvel).
If references are entirely missing, you can add them using this form.