THE INFLUENCE OF RISK AVERSION ON THE UPTAKE OF SET‐ASIDE: A MOTAD AND CRP APPROACH

J. Hope and J. Lingard

Journal of Agricultural Economics, 1992, vol. 43, issue 3, 401-411

Abstract: This paper applies MOTAD and CRP models to the farm set‐aside decision and presents a framework for analysis which examines the influence of risk on the land‐idling decision. The results suggest that set‐aside payment at a rate of £180‐£200 per hectare would be attractive only at relatively high levels of risk aversion on an East Anglian specialist cereal farm and with moderate risk aversion on a Northumberland mixed farm. However, at identical levels of risk aversion, the area set aside was greater on the East Anglian farm. A survey to ascertain farmers' risk: income weightings is suggested as a useful adjunct to this work.

Date: 1992
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