Abstract

Explaining farmer decision making using cumulative prospect theory is of increasing importance. We present a systematic review on European farmers' preferences under the cumulative prospect theory framework. We identified 17 studies covering 2324 farmers from 12 European countries. All studies report that (on average) farmers are: (i) risk averse, (ii) loss averse, and (iii) overweight small probabilities and underweight large probabilities. However, there is a large heterogeneity across and within studies. These findings have implications for the analysis and design of policy and insurance.

Keywords

farmer; preferences; prospect theory; risk and uncertainty; risk management

Published in

Journal of Agricultural Economics
2024, Volume: 75, number: 1, pages: 465-472
Publisher: WILEY

SLU Authors

• Rommel, Jens

  • Department of Economics, Swedish University of Agricultural Sciences
    

Associated SLU-program

SLUsystematic


Sustainable Development Goals

Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
End hunger, achieve food security and improved nutrition and promote sustainable agriculture


UKÄ Subject classification

Economics
Business Administration


Publication identifier

DOI: https://doi.org/10.1111/1477-9552.12565

Permanent link to this page (URI)

https://res.slu.se/id/publ/126658