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Are Commercial Fishers Risk-Lovers?

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  • Håkan Eggert
  • Peter Martinsson

Abstract

Fishers are risk-averse according to most empirical studies, while expected-utility theory predicts risk neutrality even for sizable stakes. We test this prediction using data from a stated-choice experiment with Swedish commercial fishers. Our results show that only 48% of the fishers can be broadly characterized as risk-neutral, while 26% are modestly risk-averse, and 26% are strongly riskaverse. Fishers are more risk-neutral the higher the fraction of their household’s income comes from fishing. Sensitivity testing implies that modest stake decisions like a few days of fishing are not influenced by wealth level.

Suggested Citation

  • Håkan Eggert & Peter Martinsson, 2004. "Are Commercial Fishers Risk-Lovers?," Land Economics, University of Wisconsin Press, vol. 80(4).
  • Handle: RePEc:uwp:landec:v:80:y:2004:i:4:p550-560
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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. Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2006. "Preferences, Poverty and Politics: Experimental and Survey Data from Vietnam," Levine's Bibliography 321307000000000054, UCLA Department of Economics.
    3. Ehmke, Mariah & Lusk, Jayson & Tyner, Wallace, 2010. "Multidimensional tests for economic behavior differences across cultures," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(1), pages 37-45, January.
    4. repec:eee:ecolec:v:142:y:2017:i:c:p:257-267 is not listed on IDEAS
    5. 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.
    6. Nguyen, Quang, 2009. "Do fishermen have different preferences?: Insights from an experimental study and household data," MPRA Paper 16012, University Library of Munich, Germany.
    7. Eggert, Håkan & Tveterås, Ragnar, 2004. "Potential Rent and Overcapacity in the Swedish Baltic Sea Trawl Fishery," Working Papers in Economics 152, University of Gothenburg, Department of Economics.
    8. Hynes, Stephen & Gerritsen, Hans & Breen, Benjamin & Johnson, Mark, 2015. "Fishing site choice modelling using Vessel Monitoring System data," Working Papers 262592, National University of Ireland, Galway, Socio-Economic Marine Research Unit.
    9. Gelcich, Stefan & Edwards-Jones, Gareth & Kaiser, Michel J., 2007. "Heterogeneity in fishers' harvesting decisions under a marine territorial user rights policy," Ecological Economics, Elsevier, vol. 61(2-3), pages 246-254, March.

    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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