Are Commercial Fishers Risk Lovers?
Håkan Eggert () and
No 90, Working Papers in Economics from University of Gothenburg, Department of Economics
Empirical studies of fishers’ preferences have found that most fishers are risk-averse, while expected-utility theory predicts risk neutrality even for sizable stakes. We test this prediction using data from a stated choice experiment with Swedish commercial fishers. Our results show that almost 90% of the respondents do not behave as expected-utility maximizers. 48% of the fishers can be broadly characterized as risk-neutral, 26% as modestly risk-averse, while 26% are strongly risk-averse. Fishers are more risk-neutral the higher the fraction of their household’s income comes from fishing, while fishers with a positive attitude to individual quotas are more risk-averse. Sensitivity testing implies that decisions with modest stakes like a few days of fishing are not influenced by wealth level.
Keywords: Expected utility; Prospect theory; Risk preferences; Stated preferences; Swedish fisheries (search for similar items in EconPapers)
JEL-codes: D81 Q22 (search for similar items in EconPapers)
Pages: 25 pages
New Economics Papers: this item is included in nep-fin
Note: Published in Land Economics, 2004, Vol. 80, pp. 550-560.
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Published in Land Economics, 2004, pages 550-560.
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Journal Article: Are Commercial Fishers Risk-Lovers? (2004)
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