Digging Into Background Risk: Experiments With Farmers And Students
Author(s)
- David H Herberich
- John A List
Full TextAbstract
The article reports on a study that provides understanding of how risk preferences and other factors influence a farmer's decision to participate in a carbon offset market. It states incorporating background risk in a laboratory setting and drawing subjects from both a standard student population and a nonstandard farmer population helped to understand the decision making process. The study suggests that farmers are slightly more risk averse than students.