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Are Commercial Fishers Risk Lovers?

Author

Listed:
  • Eggert, Håkan

    () (Department of Economics, School of Economics and Commercial Law, Göteborg University)

  • Martinsson, Peter

    () (Department of Economics, School of Economics and Commercial Law, Göteborg University)

Abstract

Empirical studies of fishers’ preferences have found that most fishers are risk-averse, 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 almost 90% of the respondents do not behave as expected-utility maximizers. 48% of the fishers can be broadly characterized as risk-neutral, 26% as modestly risk-averse, while 26% are strongly risk-averse. Fishers are more risk-neutral the higher the fraction of their household’s income comes from fishing, while fishers with a positive attitude to individual quotas are more risk-averse. Sensitivity testing implies that decisions with modest stakes like a few days of fishing are not influenced by wealth level.

Suggested Citation

  • Eggert, Håkan & Martinsson, Peter, 2003. "Are Commercial Fishers Risk Lovers?," Working Papers in Economics 90, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0090
    Note: Published in Land Economics, 2004, Vol. 80, pp. 550-560.
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. Nguyen, Quang, 2009. "Do fishermen have different preferences?: Insights from an experimental study and household data," MPRA Paper 16012, University Library of Munich, Germany.
    5. repec:eee:ecolec:v:142:y:2017:i:c:p:257-267 is not listed on IDEAS
    6. 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.
    7. 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.
    8. 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

    Keywords

    Expected utility; Prospect theory; Risk preferences; Stated preferences; Swedish fisheries;

    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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