RISK ATTITUDES AMONGST AUSTRALIAN FARMERS

A procedure for the measurement of risk attitudes is developed and applied. The data for the analysis were obtained from a survey in which 201 farmers throughout Australia were asked to provide points of indifference between sure amounts of income and risky prospects. Although the conclusions from this pilot study are of a tentative nature, it is suggested that risk aversion is the most prevalent risk attitude in the agricultural sector. However, the average degree of risk aversion is relatively small and, in an expected utility context, farmers gave a wide variety of responses. The latter result highlights the need to consider the size distribution of risk attitudes in economic modelling. Influences of socioeconomic and other variables on risk attitudes are examined. The results, when considered jointly with other studies, emphasise the desirability of further research into the determination of risk attitudes