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Risk Perception And The Analysis Of Risk Attitudes

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  • Quiggin, John C.

Abstract

Risk has long been recognised as an important feature of the environment facing farmers. In recent years the von Neumann-Morgenstern expected utility theory has been used to analyse decision making under risk. However, many people behave in a manner inconsistent with the expected utility theory. One widely suggested explanation is based on subjective probability distortion. A number of attempts to incorporate this phenomenon into utility theories have been made. In this paper, the problems of analysing subjective probability distortion are discussed. Evidence from a survey of farmers' risk attitudes undertaken in conjunction with the 1977 BAE Australian Agricultural and Grazing Industries Survey is analysed in the light of this discussion.

Suggested Citation

  • Quiggin, John C., 1981. "Risk Perception And The Analysis Of Risk Attitudes," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 25(2), pages 1-10, August.
    • Handle: RePEc:ags:ajaeau:22866
    DOI: 10.22004/ag.econ.22866
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    Risk and Uncertainty;

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