Comparing Risk Attitudes of Organic and Non-Organic Farmers with a Bayesian Random Coefficient Model

Posted: 17 Jun 2008

See all articles by Cornelis Gardebroek

Cornelis Gardebroek

Wageningen UR - Agricultural Economics and Rural Policy Group

Abstract

Organic farming is usually considered to be more risky than conventional farming, but the risk aversion of organic farmers compared with that of conventional farmers has not been studied. Using a non-structural approach to risk estimation, a Bayesian random coefficient model is used to obtain individual Arrow-Pratt coefficients of absolute risk aversion for a sample of Dutch organic and non-organic arable farmers. The model is estimated using Gibbs sampling. The results indicate that organic farmers are significantly less risk averse than their non-organic colleagues.

Keywords: risk aversion, Bayesian random coefficient model, Gibbs sampling, organic farming

JEL Classification: C23, D89, Q12

Suggested Citation

Gardebroek, Cornelis, Comparing Risk Attitudes of Organic and Non-Organic Farmers with a Bayesian Random Coefficient Model. European Review of Agricultural Economics, Vol. 33, No. 4, pp. 485-510, 2006, Available at SSRN: https://ssrn.com/abstract=1146909 or http://dx.doi.org/jbl029

Cornelis Gardebroek (Contact Author)

Wageningen UR - Agricultural Economics and Rural Policy Group ( email )

Hollandseweg 1
Wageningen, 6706 KN
Netherlands
+31 0 317 482951 (Phone)
+31 0 317 484736 (Fax)

HOME PAGE: http://www.aep.wur.nl/uk/staff/gardebroek

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
796
PlumX Metrics