Article ID: | iaor20023618 |
Country: | United States |
Volume: | 83 |
Issue: | 4 |
Start Page Number: | 993 |
End Page Number: | 1009 |
Publication Date: | Nov 2001 |
Journal: | American Journal of Agricultural Economics |
Authors: | Pennings J.M.E., Garcia P. |
Keywords: | risk |
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 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.