Measuring Producers' Risk Preferences: A Global Risk Attitude Construct

J.M.E. Pennings, P. Garcia

Research output: Contribution to journalArticleAcademicpeer-review

95 Citations (Scopus)


In applied agricultural economic research various risk-attitude elicitation techniques are used. Here, we investigate whether risk-attitude measures rooted in the expected utility framework are related to measures rooted in the multi-item scale framework. Using a second-order factor analytical model, and data obtained from personal computer-guided interviews with 373 farmers, we investigate whether the common variance among the (latent) risk-attitude measures can be accounted for by a global risk-attitude construct. We find that them different risk-attitude measures are related, and that the global risk-attitude construct is significantly related to farmers' intention to use futures contracts. Our research suggests that farmers' risk attitude is a higher-order characteristic that cannot be effectively extracted by a single measure.
Original languageEnglish
Pages (from-to)993-1009
JournalAmerican Journal of Agricultural Economics
Issue number4
Publication statusPublished - 2001


  • confirmatory factor-analysis
  • market orientation
  • utility
  • decision
  • derivatives
  • programs
  • strength
  • futures
  • models
  • choice


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