Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/117326
Authors: 
Moser, Stefan
Mußhoff, Oliver
Year of Publication: 
2015
Series/Report no.: 
EFForTS Discussion Paper Series 14
Abstract: 
This article compares the use of risk-increasing and risk-reducing production inputs with the experimentally measured risk attitudes of farmers. For this purpose, the Just-Pope production function indicates production inputs' influence on output risk and a Holt-Laury lottery is used to measure the producer´s risk attitude. We test whether more risk averse farmers use more risk-reducing and less risk-increasing production inputs. Therefore, we apply a unique data set which includes 185 small-scale farmers which are producing rubber on 260 plots on the island of Sumatra, Indonesia. The Just-Pope production function indicates that fertiliser usage has a risk-reducing effect, whereas herbicide usage and plot size have risk-increasing effects. For labour and plantation age, the influence on output risk is ambiguous. By including the outcome of a Holt-Laury lottery into the analysis, we found the expected result that more risk averse farmers use more (risk-reducing) fertiliser and less (risk-increasing) herbicides. These consistent results provide an example for the external validity of measuring risk attitude with the Holt-Laury lottery.
Subjects: 
Holt-Laury lottery
Just-Pope production function
output risk
rubber
Indonesia
JEL: 
C91
C93
Q12
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by-nd/4.0/
Document Type: 
Working Paper

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