Determinants of farmers’ off-farm work decisions: How important are domain specific risk and uncertainty attitudes?

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Abstract

The paper examines the relationship between off-farm work decisions and risk and uncertainty attitudes. Data was obtained from controlled lab-in-field experiment on farmers’ choices over pairs of continuous prospects. The paper estimated parametric functional forms of the value and weighting functions based on cumulative prospect theory and examined the effect on important off-farm work decisions. The paper find evidence that farmers that participated in off-farm jobs were more averse to losses under conditions of risk but not so for uncertainty. However, these categories of farmers were more pessimistic about losses under both conditions (i.e. risk and uncertainty). The results also show that risk and uncertainty aversion significantly differ between farmers that participated in paid versus self-employed off-farm jobs. Age, farm size, tenure, location, membership of association, location were also significant determinants off-farm work decisions.
Original languageEnglish
Pages1-26
Number of pages26
DOIs
Publication statusPrint publication - May 2020
EventAgricultural Economics Society - AES > 94th Annual Conference, April 15-17, 2020, K U Leuven, Belgium  -
Duration: 15 Apr 202017 Apr 2020
Conference number: 94

Conference

ConferenceAgricultural Economics Society - AES > 94th Annual Conference, April 15-17, 2020, K U Leuven, Belgium 
Period15/04/2017/04/20

Keywords

  • Risk ; uncertainty ; cumulative prospect theory ; off-farm ; decision making

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