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Role of farmers' risk and ambiguity preferences on fertilization decisions: An experiment

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  • Camille Tevenart
  • Marielle Brunette

Abstract

In a context of climate change, the agricultural sector offers a potential of mitigation. However, most of the farmers do not adopt the mitigation practices recommended, among them the reduction of nitrogen fertilization. In parallel, various uncertainties characterize agricultural production, so that farmer's risk and ambiguity preferences may be potential determinants to the adoption (or not) of mitigation practices. This is precisely the objective of this paper to explore this way. For that purpose, we realize a questionnaire submitted to French farmers where we elicit risk and ambiguity preferences through simple lottery choices, and then we ask questions about the farmer's fertilization decisions. We show that risk aversion as well as ambiguity aversion impact fertilization practices, through diverse drivers and in an opposite direction. This result implies that fertilization practices are more complex than only classic risk-related behaviors. The incentive approaches associated with mitigation and fertilization have to take into account this complexity.

Suggested Citation

  • Camille Tevenart & Marielle Brunette, 2019. "Role of farmers' risk and ambiguity preferences on fertilization decisions: An experiment," Working Papers 1903, Chaire Economie du climat.
    • Handle: RePEc:cec:wpaper:1903
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    2. Andreas Meyer-Aurich & Yusuf Nadi Karatay, 2022. "Greenhouse Gas Mitigation Costs of Reduced Nitrogen Fertilizer," Agriculture, MDPI, vol. 12(9), pages 1-13, September.
    3. Richard KOENIG & Marielle BRUNETTE, 2023. "Subjective barriers and determinants to crop insurance adoption," Working Papers of BETA 2023-25, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    4. Chai, Yuan & J. Pannell, David & G. Pardey, Philip, 2023. "Nudging farmers to reduce water pollution from nitrogen fertilizer," Food Policy, Elsevier, vol. 120(C).
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    6. Edith Kouakou & Marielle Brunette & Richard Koenig & Philippe Delacote, 2023. "Crop Yield Risks and Nitrogen Fertilisation in French Agriculture: Implications for Crop Insurance," Working Papers of BETA 2023-38, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    7. Doan Nainggolan & Faizal Rahmanto Moeis & Mette Termansen, 2023. "Does risk preference influence farm level adaptation strategies? – Survey evidence from Denmark," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 28(7), pages 1-23, October.

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    Keywords

    Risk Uncertainty; Ambiguity; Agriculture; Fertilization; Mitigation;
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