MAGNITUDE ESTIMATION: AN APPLICATION TO FARMERS' RISK-INCOME PREFERENCES

Magnitude estimation, a technique developed by psychology for obtaining ratio scaled values, was used to derive risk-income preferences of ninety-one central Indiana farmers. Both variability-income and bankruptcy-income measures were developed and related to farmers' socio-economic attributes. Wealth and education had limited effects compared with off-farm employment, percent debt and expected levels of income, percent debt and net worth growth. Magnitude estimation provided reliable estimates of preferences. Farmers gave greater importance to the bankruptcy-income measure of risk-income preferences, but only a small portion of the variation of either measure could be explained.


Issue Date:
1981-12
Publication Type:
Journal Article
Record Identifier:
http://ageconsearch.umn.edu/record/32583
PURL Identifier:
http://purl.umn.edu/32583
Published in:
Western Journal of Agricultural Economics, Volume 06, Number 2
Page range:
239-248
Total Pages:
10




 Record created 2017-04-01, last modified 2018-01-22

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