Risk Preference and Long-Run Performance of the Dairy Farm

Loren William Tauer

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Decision-Making and Behavioral Economics Agricultural economics and policies Agricultural risk and resilience

Abstract

Farm performance measures based upon 10 years of individual farm data are linearly regressed on risk preferences of 41 dairy farmers. Greater aversion to risk produces a lower average but more stable income, although the importance of risk preferences in determining long-run performance appears to be minor

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