Self-protection and self-insurance in pest management: The role of risk preferences and beliefs

Douadia Bougherara (), Céline Nauges, François Salanié and Fabienne Le Rolland Femenia
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Douadia Bougherara: CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier
Céline Nauges: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
François Salanié: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Fabienne Le Rolland Femenia: SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement

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Abstract: Farmers worldwide manage yield risk mostly by applying pesticides, with possible negative impacts on human health and the environment. To analyse these decisions, we set up a two-period model in which a farmer first decides whether to adopt preventive measures that lower the risk of pest infestation (self-protection), before deciding ex-post about pesticides application (self-insurance). These two decisions are found to be substitutes in most cases. Under some conditions, we show that more risk-averse farmers apply more pesticides (i.e., more self-insurance) and exert fewer preventive efforts (i.e., less self-protection). We illustrate these theoretical findings using simulations calibrated from real data on crop producers from France. Decisions seem primarily driven by the costs of prevention and pesticides and by farmers' risk beliefs, while farmers' risk aversion plays a relatively minor role.

Keywords: risk aversion; beliefs; pesti- cides; self-insurance; prevention; risk (search for similar items in EconPapers)
Date: 2026-02-23
Note: View the original document on HAL open archive server: https://hal.science/hal-05523016v1
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