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- Title
Stochastic Production and Heterogeneous Risk Preferences: Commercial Fishers' Gear Choices.
- Authors
Eggert, HÅkan; Tveteras, Ragnar
- Abstract
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.
- Subjects
SWEDEN; FISHERY economics; STOCHASTIC processes; RISK aversion; PRODUCTION functions (Economic theory); ECONOMIC models; FISHERS
- Publication
American Journal of Agricultural Economics, 2004, Vol 86, Issue 1, p199
- ISSN
0002-9092
- Publication type
Article
- DOI
10.1111/j.0092-5853.2004.00572.x