Stochastic Production and Heterogeneous Risk Preferences: Commercial Fishers' Gear Choices
We present a model of fishers' gear choice, which allows for heterogeneity both in production technology and risk preferences and apply it on a panel of Swedish trawlers. Stochastic revenue functions are estimated and used to predict the mean and standard deviation of revenue for each trip. In a random-parameters logit model, we test if these predicted values explain gear choice. A majority of fishers respond positively to increased mean and negatively to increased variability of expected landing values, indicating risk aversion, but also show a strong tendency to choose the same gear used on the previous trip. Copyright 2003 American Agricultural Economics Association.
Year of publication: |
2004
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Authors: | Eggert, Håkan ; Tveteras, Ragnar |
Published in: |
American Journal of Agricultural Economics. - American Agricultural Economics Association. - Vol. 86.2004, 1, p. 199-212
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Publisher: |
American Agricultural Economics Association |
Saved in:
freely available
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