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Heterogeneous and Correlated Risk Preferences in Commercial Fishermen: The Perfect Storm Dilemma

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  • Martin Smith

  • James Wilen

Abstract

Commercial fishing involves both physical and financial risks. This combination questions whether fishermen are inherently risk-loving, whether physical and financial risk preferences are correlated, and how much preferences vary across fishermen. This paper addresses these questions with a panel data set of daily participation decisions in the California sea urchin dive fishery. Weather buoy data and the prevalence of great white sharks at a particular fishing site proxy for physical risk. Overall, urchin fishermen are not risk-loving on average, risk preferences are heterogeneous, and there is some evidence that risk preferences are positively correlated across physical and financial domains. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Martin Smith & James Wilen, 2005. "Heterogeneous and Correlated Risk Preferences in Commercial Fishermen: The Perfect Storm Dilemma," Journal of Risk and Uncertainty, Springer, vol. 31(1), pages 53-71, July.
    • Handle: RePEc:kap:jrisku:v:31:y:2005:i:1:p:53-71
    DOI: 10.1007/s11166-005-2930-7
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