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Higher-Order Risk Preferences and Risk-Management Behavior: Evidence from Italian Winegrowers

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  • Barba, Francesca R.
  • Drichoutis, Andreas
  • Palma, Marco A.
  • Cerroni, Simone

Abstract

Risk preferences play a central role in farmers’ decisions, such as technology adoption, diversification, and uptake of insurance and other risk-management tools; yet agricultural economics has largely focused on risk aversion, while higher-order risk preferences remain less explored. This paper studies the external validity of experimentally elicited risk aversion, prudence, and temperance in a sample of 162 Italian winegrowers. Preferences are measured through incentivized binary lottery choices and linked to stated intentions, self-reported risk-management behavior, and an observed preventive-technology adoption. Preliminary results show that all three attitudes are present in the sample and capture distinct behavioral dimensions. Risk aversion has no systematic association with external outcomes. Prudence is positively related to stated intentions, but not to observed behavior. Temperance is associated with current insurance status and with the absence of active defense practice adoption. Overall, higher-order risk preferences show limited, outcome-specific external validity for agricultural risk-management behavior.

Suggested Citation

  • Barba, Francesca R. & Drichoutis, Andreas & Palma, Marco A. & Cerroni, Simone, 2026. "Higher-Order Risk Preferences and Risk-Management Behavior: Evidence from Italian Winegrowers," 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri 404409, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea26:404409
    DOI: 10.22004/ag.econ.404409
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