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Role of farmers' risk and ambiguity preferences on fertilization decisions: An experiment

Camille Tevenart and Marielle Brunette

Working Papers from Chaire Economie du climat

Abstract: In a context of climate change, the agricultural sector offers a potential of mitigation. However, most of the farmers do not adopt the mitigation practices recommended, among them the reduction of nitrogen fertilization. In parallel, various uncertainties characterize agricultural production, so that farmer's risk and ambiguity preferences may be potential determinants to the adoption (or not) of mitigation practices. This is precisely the objective of this paper to explore this way. For that purpose, we realize a questionnaire submitted to French farmers where we elicit risk and ambiguity preferences through simple lottery choices, and then we ask questions about the farmer's fertilization decisions. We show that risk aversion as well as ambiguity aversion impact fertilization practices, through diverse drivers and in an opposite direction. This result implies that fertilization practices are more complex than only classic risk-related behaviors. The incentive approaches associated with mitigation and fertilization have to take into account this complexity.

Keywords: Risk Uncertainty; Ambiguity; Agriculture; Fertilization; Mitigation (search for similar items in EconPapers)
Pages: 30 pages
Date: 2019
New Economics Papers: this item is included in nep-agr and nep-upt
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