Agricultural Risk Aversion Revisited: A Multicriteria Decision-Making Approach

Jose Antonio Gomez-Limon, Laura Riesgo and Manuel Arriaza Balmón

No 24827, 2002 International Congress, August 28-31, 2002, Zaragoza, Spain from European Association of Agricultural Economists

Abstract: In modelling farm systems it is widely accepted that risk plays a central role. Furthermore, farmers' risk aversion determines their decisions in both the short and the long run. This paper presents a methodology based on multiple criteria mathematical programming to obtain relative and absolute risk aversion coefficients. We rely on multiattribute utility theory (MAUT) to elicit a separable additive multiattribute utility function and then estimate the risk aversion coefficients and apply this methodology to an irrigated area of Northern Spain. The results show a wide variety of attitudes to risk among farmers, who mainly exhibit decreasing absolute risk aversion (DARA) and constant relative risk aversion (CRRA).

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 16
Date: 2002
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae02:24827

DOI: 10.22004/ag.econ.24827

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