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Risk perception, attitudes towards risk and risk management: evidence and implications

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Abstract
The comprehensive risk analysis of a business such as farming entails questions on what is at stake, how important is the risk concern and how to deal with it. We performed a sequential mixed method, with the in-depth interviews in the first stage (n = 35), followed by a survey on the Flemish FADN (n = 614) in the second, to investigate the farmers' risk perception, the attitudes towards risk and the perceived usefulness of the risk management strategies. We find that, rather than the short-term volatility in prices, the longer term co-evolution of expenses versus receipts is of a major concern to farmers, next to the land availability and the policy risks. Farmers are shown to be only slightly risk averse, rather risk neutral even. Further, our results suggest that farmers do not consider extensively studied risk management strategies such as contracts, futures and insurances, a valid option for their farm, and put more faith in internal strategies such as the debt management, the liquidity management and diversification. Last, risk management is to a substantial degree performed at the household level, rather than at the farm level, with strategies such as cutting the private expenses and the off-farm employment. These results hardly differ according to the farm and farmer characteristics.
Keywords
perceptions, CONSTRUCT, PREFERENCES, PRODUCERS, FARMERS, risk, risk attitudes, risk management, mixed method, FADN

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Citation

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MLA
Wauters, Erwin, Frankwin van Winsen, Yann de Mey, et al. “Risk Perception, Attitudes Towards Risk and Risk Management: Evidence and Implications.” AGRICULTURAL ECONOMICS-ZEMEDELSKA EKONOMIKA 60.9 (2014): 389–405. Print.
APA
Wauters, Erwin, van Winsen, F., de Mey, Y., & Lauwers, L. (2014). Risk perception, attitudes towards risk and risk management: evidence and implications. AGRICULTURAL ECONOMICS-ZEMEDELSKA EKONOMIKA, 60(9), 389–405.
Chicago author-date
Wauters, Erwin, Frankwin van Winsen, Yann de Mey, and Ludwig Lauwers. 2014. “Risk Perception, Attitudes Towards Risk and Risk Management: Evidence and Implications.” Agricultural Economics-zemedelska Ekonomika 60 (9): 389–405.
Chicago author-date (all authors)
Wauters, Erwin, Frankwin van Winsen, Yann de Mey, and Ludwig Lauwers. 2014. “Risk Perception, Attitudes Towards Risk and Risk Management: Evidence and Implications.” Agricultural Economics-zemedelska Ekonomika 60 (9): 389–405.
Vancouver
1.
Wauters E, van Winsen F, de Mey Y, Lauwers L. Risk perception, attitudes towards risk and risk management: evidence and implications. AGRICULTURAL ECONOMICS-ZEMEDELSKA EKONOMIKA. 2014;60(9):389–405.
IEEE
[1]
E. Wauters, F. van Winsen, Y. de Mey, and L. Lauwers, “Risk perception, attitudes towards risk and risk management: evidence and implications,” AGRICULTURAL ECONOMICS-ZEMEDELSKA EKONOMIKA, vol. 60, no. 9, pp. 389–405, 2014.
@article{5757619,
  abstract     = {The comprehensive risk analysis of a business such as farming entails questions on what is at stake, how important is the risk concern and how to deal with it. We performed a sequential mixed method, with the in-depth interviews in the first stage (n = 35), followed by a survey on the Flemish FADN (n = 614) in the second, to investigate the farmers' risk perception, the attitudes towards risk and the perceived usefulness of the risk management strategies. We find that, rather than the short-term volatility in prices, the longer term co-evolution of expenses versus receipts is of a major concern to farmers, next to the land availability and the policy risks. Farmers are shown to be only slightly risk averse, rather risk neutral even. Further, our results suggest that farmers do not consider extensively studied risk management strategies such as contracts, futures and insurances, a valid option for their farm, and put more faith in internal strategies such as the debt management, the liquidity management and diversification. Last, risk management is to a substantial degree performed at the household level, rather than at the farm level, with strategies such as cutting the private expenses and the off-farm employment. These results hardly differ according to the farm and farmer characteristics.},
  author       = {Wauters, Erwin and van Winsen, Frankwin and de Mey, Yann and Lauwers, Ludwig},
  issn         = {0139-570X},
  journal      = {AGRICULTURAL ECONOMICS-ZEMEDELSKA EKONOMIKA},
  keywords     = {perceptions,CONSTRUCT,PREFERENCES,PRODUCERS,FARMERS,risk,risk attitudes,risk management,mixed method,FADN},
  language     = {eng},
  number       = {9},
  pages        = {389--405},
  title        = {Risk perception, attitudes towards risk and risk management: evidence and implications},
  volume       = {60},
  year         = {2014},
}

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