Losses because of risk attitudes or time preference: off-farm cold storage and intertemporal marketing of apple growers in China

Shaoze Jin, Xiangping Jia and Harvey S. James

Journal of Agribusiness in Developing and Emerging Economies, 2022, vol. 14, issue 2, 350-375

Abstract: Purpose - This paper aims to explore the relationship between prudence in risk attitudes and patience of time preference of Chinese apple growers regarding off-farm cold storage of production and marketing in non-harvest seasons. The authors also consider the effect of farmer participation in cooperative-like organizations known as Farm Bases (FBs). Design/methodology/approach - The authors use multiple list methods and elicitation strategies to measure Chinese apple farmers' risk attitudes and time preferences. Because these farmers can either sell their apples immediately to supermarkets or intermediaries or place them in storage, the authors assess correlations between their storage decisions and their preferences regarding risk and time. The authors also differentiate risks involving gains and losses and empirically examine individual risk attitudes in different scenarios. Findings - Marketing decisions are moderately associated with risk attitudes but not time preference. Farmers with memberships in local farmer cooperatives are likely to speculate more in cold storage. Thus, risk aversion behavioral and psychological motives affect farmers' decision-making of cold storage and intertemporal marketing activities. However, membership in cooperatives does not always result in improved income and welfare for farmers. Research limitations/implications - The research confirms that behavioral factors may strongly drive vulnerable smallholder farmers to speculate into storage even under seasonal and uncertain marketing volatility. There is the need to think deeper about the rationale of promoting cooperatives and other agricultural forms, because imposing these without careful consideration can have negative impacts. Originality/value - Do risk and time preferences affect the decision of farmers to utilize storage facilities? This question is important because it is not clear if and how risk preferences affect the tradeoff between consuming today and saving for tomorrow, especially for farmers in developing countries.

Keywords: China; Supermarkets; Risk attitudes; Field experiment; Farm Bases; Time preference; Apples; Cold storage (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jadeep:jadee-02-2022-0030

DOI: 10.1108/JADEE-02-2022-0030

Access Statistics for this article

Journal of Agribusiness in Developing and Emerging Economies is currently edited by Anthony N. Rezitis

More articles in Journal of Agribusiness in Developing and Emerging Economies from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().