Is the risk attitude measured with the Holt and Laury task reflected in farmers’ production risk?

Elisabeth Vollmer, Daniel Hermann and Oliver Musshoff

European Review of Agricultural Economics, 2017, vol. 44, issue 3, 399-424

Abstract: This paper investigates the explanatory power of the risk attitude measured with the Holt and Laury (HL) task for farmers’ production decision behaviour. In order to achieve this, a Just and Pope production function is estimated using panel data of German farmers. The results show that the farmers’ risk attitude elicited using the HL task is correlated with their respective production risk. With higher risk aversion, less production risk is tolerated. Consequently, a neutrally framed HL task is proven to be an appropriate reflection of the risk farmers take in real production decisions.

Keywords: farmers’ risk attitude; Holt and Laury task; experimental economics; production risk; panel data (search for similar items in EconPapers)
JEL-codes: C91 D81 Q12 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (14)

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