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Risk Aversion: Experimental Evidence from South African Fishing Communities

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  • Kerri Brick
  • Martine Visser
  • Justine Burns

Abstract

We estimate the risk attitudes of a large sample of small-scale fishers from various fishing communities along the west coast of South Africa, using subjects’ choices over lotteries with real monetary prizes. We find that participants are moderately risk averse and that risk attitudes vary with certain socio-demographic variables. In particular, females are found to be more risk averse than their male counterparts, while quota holders are more risk loving. Logistic regression analysis indicates that risk attitudes have implications for non-compliance with fisheries regulation. Specifically, greater risk aversion translates into a reduction in the odds of catching illegally. Furthermore, in the case of gender, female fishers and female fishers with fishing rights are more likely to comply with fisheries regulation. These findings have important implications for the characterisation of risk attitudes in fisheries policy applications and for the management of marine resources.

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Bibliographic Info

Paper provided by Economic Research Southern Africa in its series Working Papers with number 227.

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Length: 19 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:rza:wpaper:227

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Keywords: risk attitudes risk aversion experiments fishing rights compliance and South Africa;

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Cited by:
  1. Sundar, B. & Virmani, Vineet, . "Attitudes towards Risk of Forest Dependent Communities - Evidence from Andhra Pradesh," IIMA Working Papers WP2013-12-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
  2. Norbert Hirschauer & Oliver Musshoff & Syster C. Maart-Noelck & Sven Gruener, 2014. "Eliciting risk attitudes -- how to avoid mean and variance bias in Holt-and-Laury lotteries," Applied Economics Letters, Taylor & Francis Journals, vol. 21(1), pages 35-38, January.
  3. Liebenehm, Sabine & Waibel, Hermann, 2012. "Simultaneous estimation of risk and time preferences among small-scale cattle farmers in West Africa," Hannover Economic Papers (HEP) dp-501, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  4. Dörschner, Till & Musshoff, Oliver, 2013. "Does the risk attitude influence the farmers' willingness to participate in agri-environmental measures? – A normative approach to evaluate ecosystem services," 53rd Annual Conference, Berlin, Germany, September 25-27, 2013 156112, German Association of Agricultural Economists (GEWISOLA).
  5. Holst, Gesa Sophie & Mußhoff, Oliver & Dörschner, Till, 2013. "Abschätzung der Politikfolgen eines Belohnungs- und Bestrafungsszenarios zur Förderung des Blühstreifenanbaus – ein Framed Field Experiment," 53rd Annual Conference, Berlin, Germany, September 25-27, 2013 156114, German Association of Agricultural Economists (GEWISOLA).
  6. Ihli, Hanna Julia & Chiputwa, Brian & Musshoff, Oliver, 2013. "Do Changing Probabilities or Payoffs in Lottery-Choice Experiments Matter? Evidence from Rural Uganda," Discussion Papers 158146, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
  7. Visser, Martine & Burns, Justine, 2013. "Inequality, Social Sanctions and Cooperation within South African Fishing," SALDRU Working Papers 117, Southern Africa Labour and Development Research Unit, University of Cape Town.

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