1 / 2019-12-30 08:20:21

Risk averse and its influence on farmers’ growing area decision making:evidence from vegetable of China

risk averse, production decision, farmer behavior, fresh produce

This research explores how risk averse influencing acreage decision making behavior to different farm-size of farmers. Firstly, an acreage decision making model, focusing on risk aversion, is developed on which derive out expected utility. Then, by using this optimization model, a deduction method is established to elucidation risk aversion ratio. Next, the risk aversion ratio result has been derived and discussed with specific regional characters with the developed method on national vegetable survey data from China. The results reveal that large size farmers have a higher risk averse than small and medium size farmers; while that of large farmers is primarily affected by the fixed investment. This study also shows that using historical acreage decision making data is feasible to reduce farmers’ risk preference. These findings may help to policy makers for better management of land usage about vegetable farming system.