effects of EU agricultural policy changes on farmers' risk attitudes

This analysis utilises a model of production under risk estimated on Finnish farm-level data to measure farmers' risk attitudes in a changing policy environment. We find evidence of heterogeneous risk preferences among farmers, as well as notable changes over time in farmers' degree of ris...

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Bibliographic Details
Published in:European review of agricultural economics 2009-03, Vol.36 (1), p.53-77
Main Authors: Koundouri, Phoebe, Laukkanen, Marita, Myyrä, Sami, Nauges, Céline
Format: Article
Language:English
Subjects:
Agricultural economics
Agricultural policy
Agricultural production
Agriculture
Attitudes
Barley
C33
Common Agricultural Policy
D81
decoupled payments
Economic models
Economic relations
Economic statistics
Economic theory
Economics and Finance
EU membership
European Union
Farm income
Farm price supports
Farmers
Farms
Finland
Humanities and Social Sciences
Preferences
Production models
Public opinion
Q12
Q18
Risk
Risk aversion
risk preferences
Studies
Utility functions
Wheat
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Summary:This analysis utilises a model of production under risk estimated on Finnish farm-level data to measure farmers' risk attitudes in a changing policy environment. We find evidence of heterogeneous risk preferences among farmers, as well as notable changes over time in farmers' degree of risk aversion. This result is due to the increase in the non-random part of farm income generated by the policy change after Finland's European Union accession. The analysis confirms the assertion that agricultural policies that are decoupled from production do affect input use and crop mix through their effect on farmers' risk attitudes.
ISSN:0165-1587
1464-3618
DOI:10.1093/erae/jbp003