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Assessing farmers' risk attitudes based on economic, social, personal, and environmental sources of risk: evidence from Sweden

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  • Lagerkvist, Carl Johan

Abstract

This paper examines farmers' risk attitudes, obtained by responses to sources of risk, using an attitudinal scale approach. Economic, social, personal, and environmental sources of risk are considered in the measurement of risk attitudes. In addition, use of various types of expertise and information sources are included as risk management tools. Inferences are drawn from results of a survey mailed to a representative random sample of 500 farmers drawn from the population of medium to large farms (by acreage) in southern Sweden. Regarding the adequacy of the results it was found that a mail survey produces results similar to earlier results obtained by personal interview. Farmers' responses to the attitudinal scales showed levels of communal variation between 80 and 83%, which is higher than the result reported by Bard and Barry (2000) (68.6%). This indicates that a broader field of risk sources improves the measurement of risk attitudes. The results further indicate a slight degree of risk aversion and that crop and livestock farmers use different sets of risk management tools, depending on their risk attitudes. The results of this work are of relevance because if attitudes induce risk response, then the communication approaches for extension services or policy makers will be very different than if it is 'risk', as that word is typically used.

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  • Lagerkvist, Carl Johan, 2005. "Assessing farmers' risk attitudes based on economic, social, personal, and environmental sources of risk: evidence from Sweden," 2005 Annual meeting, July 24-27, Providence, RI 19361, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea05:19361
    DOI: 10.22004/ag.econ.19361
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    1. Saul Ngarava & Abbyssinia Mushunje & Amon Taruvinga & Peter Mukarumbwa & Simbarashe Tatsvarei & Ebenezer T Megbowon, 2018. "Determinants of Risk Behaviour in Livestock Development Programs: Evidence from South Africa's Kaonafatso Yadikgomo (Kyd) Scheme," Journal of Economics and Behavioral Studies, AMH International, vol. 10(5), pages 7-15.
    2. Sulewski, Piotr & Kłoczko-Gajewska, Anna, 2014. "Farmers’ risk perception, risk aversion and strategies to cope with production risk: an empirical study from Poland," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 116(3), pages 1-8, December.
    3. Nataliya Trusova, 2017. "Structure of the Total Financial Potential of Agriculture: Regional Aspect," Oblik i finansi, Institute of Accounting and Finance, issue 3, pages 119-125, September.
    4. Bardhan, D. & Tewari, S.K., 2007. "Risk Attitude and Risk Management Strategies: An Analysis of Dairy Farmers in Tarai Area of Uttaranchal State," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 62(4), pages 1-16.

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