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Estimation of farmers' risk attitude: an econometric approach
Author(s) -
BarShira Z.,
Just R.E.,
Zilberman D.
Publication year - 1997
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.1574-0862.1997.tb00475.x
Subject(s) - arrow , economics , risk aversion (psychology) , estimation , econometric model , econometrics , econometric analysis , expected utility hypothesis , financial economics , computer science , management , programming language
An econometric procedure for estimating Arrow‐Pratt coefficients of risk aversion is derived. The model of farmers allocating land among different crops, and time between leisure and labor, allows for testing Arrow's hypotheses of decreasing absolute risk aversion and increasing relative risk aversion. The empirical results support these hypotheses.