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Understanding how risk preferences and social capital affect farmers’ behavior to anticipatory and reactive adaptation options to climate change: the case of vineyard farmers in central Chile

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  • Alvarado, E.
  • Ibanez, M.
  • Brummer, B.

Abstract

The effects of climate change on agriculture have been widely studied. However, it is necessary to keep studying the responses that farmers could have to climate change. One of these responses is the adaptation. We have used anticipatory and reactive adaptation because we wanted to know if farmers prefer options to avoid or to face negative effects. The objective of this research was to understand how risk preferences along with social capital affect the decision to implement anticipatory or reactive adaptation options to climate change. This study took place in central Chile, data were collected through a field experiment from September to December 2016 with 163 vineyard farmers; we used the structural and midpoint methods to estimate the Cumulative Prospect Theory (CPT) parameters. Finally, we identify 5 anticipatory and 4 reactive adaptation options. The parameters indicate vineyard farmers are strongly risk averse and sensitive to losses, and their determinants are grape area, membership and subjective norms for risk aversion, and age, household size, and education for loss aversion. The main drivers for anticipatory adaptation are network, trust, time to market and area, and the main drivers for reactive adaptation are risk aversion, institutional trust, age and time to market.

Suggested Citation

  • Alvarado, E. & Ibanez, M. & Brummer, B., 2018. "Understanding how risk preferences and social capital affect farmers’ behavior to anticipatory and reactive adaptation options to climate change: the case of vineyard farmers in central Chile," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275978, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae18:275978
    DOI: 10.22004/ag.econ.275978
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    References listed on IDEAS

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    1. Kelly, David L. & Kolstad, Charles D. & Mitchell, Glenn T., 2005. "Adjustment costs from environmental change," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 468-495, November.
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    3. Salvatore Di Falco & Marcella Veronesi & Mahmud Yesuf, 2011. "Does Adaptation to Climate Change Provide Food Security? A Micro-Perspective from Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(3), pages 825-842.
    4. Alpizar, Francisco & Carlsson, Fredrik & Naranjo, Maria A., 2011. "The effect of ambiguous risk, and coordination on farmers' adaptation to climate change — A framed field experiment," Ecological Economics, Elsevier, vol. 70(12), pages 2317-2326.
    5. Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2010. "Risk and Time Preferences: Linking Experimental and Household Survey Data from Vietnam," American Economic Review, American Economic Association, vol. 100(1), pages 557-571, March.
    6. Barry Smit & Ian Burton & Richard Klein & J. Wandel, 2000. "An Anatomy of Adaptation to Climate Change and Variability," Climatic Change, Springer, vol. 45(1), pages 223-251, April.
    7. Ward, Patrick S. & Singh, Vartika, 2013. "Risk and Ambiguity Preferences and the Adoption of New Agricultural Technologies: Evidence from Field Experiments in Rural India," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150794, Agricultural and Applied Economics Association.
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    Keywords

    Agricultural and Food Policy; Farm Management; International Development;

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