Measuring producers' risk preferences: A global risk-attitude construct

Joost M.E. Pennings, Philip Garcia

Research output: Contribution to journalArticlepeer-review


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.

Original languageEnglish (US)
Pages (from-to)993-1009
Number of pages17
JournalAmerican Journal of Agricultural Economics
Issue number4
StatePublished - 2001


  • Expected utility
  • Futures usage
  • Global risk-attitude construct
  • Multi-item scale
  • Second-order factor analysis
  • Validity

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics


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