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Elicitation Of Risk Preferences For Irrigation Farmers In The Winterton Area: Wealth Risk Versus Annual Income Risk

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  • Botes, J. H. F.
  • Bosch, D. J.
  • Oosthuizen, L. K.

Abstract

The purpose of this article is to measure the absolute risk aversion coefficients (RACs) of irrigation farmers in the Winterton area if annual income and wealth are at stake. Decision makers became more risk averse when wealth instead of annual income is at stake. RACs measured at low, medium and high annual income and wealth levels, showed no change when annual income or wealth levels increased. The majority of irrigation farmers have risk neutral annual income and wealth risk preferences.

Suggested Citation

  • Botes, J. H. F. & Bosch, D. J. & Oosthuizen, L. K., 1994. "Elicitation Of Risk Preferences For Irrigation Farmers In The Winterton Area: Wealth Risk Versus Annual Income Risk," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 33(1), March.
    • Handle: RePEc:ags:agreko:267697
    DOI: 10.22004/ag.econ.267697
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    References listed on IDEAS

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    2. McCarl, Bruce & Musser, Wesley, 1985. "Risk Analysis For Agricultural Production Firms: Concepts, Information Requirements And Policy Issues: Modeling Long Run Risk In Production And Investment Decisions," Staff Paper Series 302396, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    3. Raskin, Rob & Cochran, Mark J., 1986. "Interpretations And Transformations Of Scale For The Pratt-Arrow Absolute Risk Aversion Coefficient: Implications For Generalized Stochastic Dominance," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 11(2), pages 1-7, December.
    4. Cochran, Mark J., 1986. "Stochastic Dominance: The State Of The Art In Agricultural Economics," Regional Research Projects > 1986: S-180 Annual Meeting, March 23-26, 1986, Tampa, Florida 271995, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    5. Cochran, Mark C. & Raskin, Rob, 1987. "Interpretations And Transformations Of Scale For The Pratt-Arrow Absolute Risk Aversion Coefficient: Implications For Generalized Stochastic Dominance: Reply," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 12(2), pages 1-2, December.
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    1. Botes, J. H. F. & Oosthuizen, L. K., 1994. "The Effects Of Pumping Restrictions On Irrigation Efficiency: Implications For Eskom'S Time-Of-Use Electricity Supply To Rural Areas," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 33(4), December.

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