Developing a scale for assessing risk attitudes of agricultural decision makers

Abstract

This study adapts a methodology formulated in the social sciences to develop a scale for measuring an economic agent's attitude toward risk. The scale assesses risk attitudes by eliciting farmers' opinions towards risk management tools using a Likert procedure. The methodology validates the scale with a scientific risk attitude measure and compares the scale to the farmers' self-assessment of their risk attitudes. The resulting scale methodology could be administered to people without the need for personal interviews. The subjects for this study were Midwestern farmers, but the methodology can be applied to any sector of the agricultural industry. © 2001 Elsevier Science Inc.