Risk preferences under heterogeneous environmental risk

Roland Olbrich (), Martin Quaas, Andreas Haensler and Stefan Baumgaertner
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Roland Olbrich: Department of Sustainability Sciences and Department of Economics, Leuphana University of Lueneburg, Germany
Andreas Haensler: Terrestrial Hydrology Group, Max-Planck-Institute for Meteorology, Hamburg, Germany
Stefan Baumgaertner: Department of Sustainability Sciences and Department of Economics, Leuphana University of Lueneburg, Germany
Authors registered in the RePEc Author Service: Stefan Baumgärtner

No 208, Working Paper Series in Economics from University of Lüneburg, Institute of Economics

Abstract: We study risk preferences and their determinants for commercial cattle farmers in Namibia who are subject to high and heterogeneous precipitation risk, using data from questionnaire and field experiments, simulated data for on-farm precipitation risk and data on famers’ previous place of residence. We find that the relationship between risk preferences and precipitation risk is contingent on early-life experience with this risk. We also find that adult farmers self-select themselves onto farms according to their risk preferences. Results are not confounded by background risks or liquidity constraint.

Keywords: risk preferences; environmental risk; experimental elicitation; endogenous preferences; self-selection; field experiment (search for similar items in EconPapers)
JEL-codes: D81 Q12 Q57 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2011-08
New Economics Papers: this item is included in nep-agr, nep-cbe and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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