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Risk Attitudes Amongst Australian Farmers

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  • Bond, Gary E.
  • Wonder, Bernard

Abstract

A procedure for the measurement of risk attitudes is developed and applied. The data for the analysis were obtained from a survey in which 201 farmers throughout Australia were asked to provide points of indifference between sure amounts of income and risky prospects. Although the conclusions from this pilot study are of a tentative nature, it is suggested that risk aversion is the most prevalent risk attitude in the agricultural sector. However, the average degree of risk aversion is relatively small and, in an expected utility context, farmers gave a wide variety of responses. The latter result highlights the need to consider the size distribution of risk attitudes in economic modelling. Influences of socioeconomic and other variables on risk attitudes are examined. The results, when considered jointly with other studies, emphasise the desirability of further research into the determination of risk attitudes.

Suggested Citation

  • Bond, Gary E. & Wonder, Bernard, 1980. "Risk Attitudes Amongst Australian Farmers," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(01), April.
  • Handle: RePEc:ags:ajaeau:23064
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    References listed on IDEAS

    as
    1. P. B. R. Hazell, 1971. "A Linear Alternative to Quadratic and Semivariance Programming for Farm Planning under Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 53(1), pages 53-62.
    2. Dillon, John L., 1971. "An Expository Review of Bernoullian Decision Theory in Agriculture: Is Utility Futility?," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(01), March.
    3. B. Curtis Eaves, 1971. "On Quadratic Programming," Management Science, INFORMS, vol. 17(11), pages 698-711, July.
    4. Anderson, Jock R. & Feder, Gershon, 2007. "Agricultural Extension," Handbook of Agricultural Economics, Elsevier.
    5. R. R. Officer & A. N. Halter, 1968. "Utility Analysis in a Practical Setting," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 50(2), pages 257-277.
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    Keywords

    Risk and Uncertainty;

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