Risk Preferences Estimation for Small Raspberry Producers in the Bío-Bío Region, Chile

摘要

Decisions are strongly influenced by risk and risk preferences of decision makers; however, in Chile there are few studies in the agricultural sector focused on this topic. The present paper analyzes the risk preferences of small producers of raspberries ( Rubus idaeus L.) and the production function associated with their production system in the Bío-Bíio Region of Chile. Under a mean-variance approach, the estimation procedure uses a flexible utility function to incorporate a variety of risk preference alternatives. Three different estimation procedures were used: Least Squares Estimation, Seemingly Unrelated Regression and Full Information Maximum Likelihood, which revealed the same conclusions. Results showed that small farmers are risk averse (γ = 0.104) and present increasing relative and absolute aversion to risk (θ = 0.099 2 + β₃ + β₄ is equal to 0.18. The hypothesis of constant returns to scale is rejected with 99% confidence.