RISK PERCEPTION AND THE ANALYSIS OF RISK ATTITUDES

John Quiggin

Australian Journal of Agricultural Economics, 1981, vol. 25, issue 2, 10

Abstract: Risk has long been recognised as an important feature of the environment facing farmers. In recent years the von Neumann-Morgenstern expected utility theory has been used to analyse decision making under risk. However, many people behave in a manner inconsistent with the expected utility theory. One widely suggested explanation is based on subjective probability distortion. A number of attempts to incorporate this phenomenon into utility theories have been made. In this paper, the problems of analysing subjective probability distortion are discussed. Evidence from a survey of farmers' risk attitudes undertaken in conjunction with the 1977 BAE Australian Agricultural and Grazing Industries Survey is analysed in the light of this discussion.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Date: 1981
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Citations: View citations in EconPapers (16)

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Journal Article: RISK PERCEPTION AND THE ANALYSIS OF RISK ATTITUDES (1981)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ajaeau:22866

DOI: 10.22004/ag.econ.22866

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