Eliciting risk preferences and coping strategies adopted to cope with various covariate and idiosyncratic risks in agriculture

The present study analyses farmers’ attitudes towards risk and examine the effect of specific socio-demographic and socio-economic characteristics on farmers’ risk attitudes. A total of 400 randomly selected farmers participated in the experiments. The study applied Modified Holt and Laury Lottery method for measuring risk attitudes. Effect of demographic and socioeconomic variables on farmers’ risk attitude was measured using ordered probit model dealing with risky outcomes. The findings show a negative risk-aversion negatively related to household size and off-farm income. Experimental design in abstracted from reality and stands simpler than risky situations that would perhaps occur in an actual farming setting. The observations helped us to deduce that some challenges are common in both geographic areas whereas some problems that the farmers face are area-specific.