TY - JOUR
T1 - Measuring producers' risk preferences
T2 - A global risk-attitude construct
AU - Pennings, Joost M.E.
AU - Garcia, Philip
N1 - Funding Information:
The authors are very grateful for the generous participation of the 373 farmers in our personal computer-assisted interviews. Financial support provided by the “Alg emene Stichting Termijnhandel (AST),” EURONEXT, the Chicago Mercantile Exchange, the Foundation for Research in Agricultural Derivatives, the Niels Stensen Foundation, and the Office for Futures and Options Research is gratefully acknowledged. The authors thank J.A. Bijkerk for building a user-friendly interface for the computer-assisted personal interviews. The authors express special thanks to C. Ennew, S.H. Irwin, R.M. Leuthol d, M.T.G. Meu-lenberg, A. Smidts, the AJAE editor and two anonymous reviewers who provided helpful comments on the research project and preliminary versions of the manuscript.
PY - 2001
Y1 - 2001
N2 - 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 the 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.
AB - 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 the 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.
KW - Expected utility
KW - Futures usage
KW - Global risk-attitude construct
KW - Multi-item scale
KW - Second-order factor analysis
KW - Validity
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U2 - 10.1111/0002-9092.00225
DO - 10.1111/0002-9092.00225
M3 - Article
AN - SCOPUS:0035667088
SN - 0002-9092
VL - 83
SP - 993
EP - 1009
JO - American Journal of Agricultural Economics
JF - American Journal of Agricultural Economics
IS - 4
ER -