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Classification Of Risk Preferences With Elicited Utility Data: Does Functional Form Matter?

Author

Listed:
  • Musser, Wesley N.
  • Wetzstein, Michael E.
  • Reece, Susan Y.
  • Musser, Lynn M.
  • Varca, Philip E.
  • Chou, Charlene C.J.

Abstract

Recently, several problems with elicited utility functions have emerged. This paper concerns a fundamental problem in risk preference classification with elicited data. For the sample in this research, different functional forms resulted in reversals in preference classifications. This paper suggests that preference classifications must be interpreted with caution.

Suggested Citation

  • Musser, Wesley N. & Wetzstein, Michael E. & Reece, Susan Y. & Musser, Lynn M. & Varca, Philip E. & Chou, Charlene C.J., 1984. "Classification Of Risk Preferences With Elicited Utility Data: Does Functional Form Matter?," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 9(2), pages 1-7, December.
    • Handle: RePEc:ags:wjagec:32133
    DOI: 10.22004/ag.econ.32133
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    References listed on IDEAS

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    1. 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.
    2. Whittaker, James K. & Winter, John R., "undated". "Risk Preferences Of Farmers: An Empirical Example, Some Questions, And Suggestions For Future Research," Risk Analysis in Agriculture: Research and Educational Developments, January 16-18, 1980, Tucson, Arizona 271571, Regional Research Projects > W-149: An Economic Evaluation of Managing Market Risks in Agriculture.
    3. Richard A. King, 1979. "Choices and Consequences," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(5), pages 839-848.
    4. Lin, William W. & Chang, Hui S., 1978. "Specification Of Bernoullian Utility Function In Decision Analysis," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 30(01), pages 1-7, January.
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    Cited by:

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    2. Zuhair, Sugu M. M. & Taylor, Daniel B. & Kramer, Randall A., 1992. "Choice of utility function form: its effect on classification of risk preferences and the prediction of farmer decisions," Agricultural Economics, Blackwell, vol. 6(4), pages 333-344, April.
    3. Scott, R. Douglass, III & Cochran, Mark J. & Nicholson, W.F., Jr., 1986. "Economic Analysis Of Cotton Integrated Pest Management Strategies: A Comment," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 18(01), pages 1-3, July.
    4. Musser, Wesley N. & Patrick, George F. & Ullerich, Stanton, 2001. "What Are Your Risk Attitudes?," Working Papers 197601, University of Maryland, Department of Agricultural and Resource Economics.

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