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

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  • Martin Smith

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  • James Wilen

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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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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Kerri Brick & Martine Visser & Justine Burns, 2012. "Risk Aversion: Experimental Evidence from South African Fishing Communities," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 133-152.
    2. Giné, Xavier & Martinez-Bravo, Monica & Vidal-Fernández, Marian, 2017. "Are labor supply decisions consistent with neoclassical preferences? Evidence from Indian boat owners," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 331-347.
    3. Johnson, Ayana Elizabeth & Saunders, Daniel Kaiser, 2014. "Time preferences and the management of coral reef fisheries," Ecological Economics, Elsevier, vol. 100(C), pages 130-139.
    4. Macusi, Edison D. & Babaran, Ricardo P. & van Zwieten, P.A.M., 2015. "Strategies and tactics of tuna fishers in the payao (anchored FAD) fishery from general Santos city, Philippines," Marine Policy, Elsevier, vol. 62(C), pages 63-73.
    5. repec:gam:jsusta:v:9:y:2017:i:11:p:2099-:d:118995 is not listed on IDEAS
    6. Abbott, Joshua K. & Wilen, James E., 2011. "Dissecting the tragedy: A spatial model of behavior in the commons," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 386-401.
    7. Nguyen, Quang, 2009. "Do fishermen have different preferences?: Insights from an experimental study and household data," MPRA Paper 16012, University Library of Munich, Germany.
    8. Smith, Martin D. & Zhang, Junjie & Coleman, Felicia C., 2008. "Econometric modeling of fisheries with complex life histories: Avoiding biological management failures," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 265-280, May.
    9. Quang Nguyen, 2011. "Does nurture matter: Theory and experimental investigation on the effect of working environment on risk and time preferences," Journal of Risk and Uncertainty, Springer, vol. 43(3), pages 245-270, December.
    10. Scott Crosson, 2016. "The Affordable Care Act and Opportunities for Change in North Carolina’s Commercial Fisheries," Marine Resource Economics, University of Chicago Press, vol. 31(2), pages 121-129.

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