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Introducing socioeconomic characteristics into production analysis under risk
Author(s) -
Feinerman Eli,
Finkelshtain Israel
Publication year - 1996
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.1996.tb00384.x
Subject(s) - socioeconomic status , categorization , production (economics) , risk aversion (psychology) , equivalence (formal languages) , actuarial science , econometrics , economics , risk analysis (engineering) , public economics , expected utility hypothesis , business , computer science , mathematics , microeconomics , sociology , financial economics , demography , artificial intelligence , population , discrete mathematics
A theoretical framework is developed to study the effects of socioeconomic factors on farmers' risk attitudes and production decisions. No maintained assumptions about the individual's utility are required. A key element in this framework is the categorization of socioeconomic factors by their effect on the farmer's risk attitudes. A simple methodology for this categorization, based on the equivalence between the Arrow–Pratt measure of risk aversion and the probability of winning demanded, is proposed. The latter is illustrated with data collected in a survey of 180 Israeli farmers from 20 villages.