Comparing risk attitudes of organic and non-organic farmers with a Bayesian random coefficient model

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Abstract

Organic farming is usually considered to be more risky than conventional farming, but the risk aversion of organic farmers compared with that of conventional farmers has not been studied. Using a non-structural approach to risk estimation, a Bayesian random coefficient model is used to obtain individual Arrow-Pratt coefficients of absolute risk aversion for a sample of Dutch organic and non-organic arable farmers. The model is estimated using Gibbs sampling. The results indicate that organic farmers are significantly less risk averse than their non-organic colleagues
Original languageEnglish
Pages (from-to)485-510
JournalEuropean Review of Agricultural Economics
Volume33
Issue number4
DOIs
Publication statusPublished - 2006

Keywords

  • preferences
  • uncertainty
  • technology
  • inference
  • behavior
  • corn

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