Analysis of Farmers’ Stated Risk Using Lotteries and Their Perceptions of Climate Change in the Northwest of Mexico

Abstract

Risk attitudes are relevant factors affecting production, management and investment decisions at the farm level. They are key factors related to farmers’ attitudes towards the environment and climate change. Several methodological approaches, which were considered to be preferable for measuring the level of risk of an economic agent, ranging from highly risk-tolerant to highly risk-averse attitudes, are available. The Multiple Price List (MPL) method is one of the stated approaches that is gaining relevance. In this study, we apply the MPL and relate the risk outcomes to farmers’ socio-economic characteristics and their perceptions of the environment and climate change. Data were collected using a face-to-face survey, carried out with a group of 370 farmers of an irrigation district, located in the northwest of Mexico. The results showed a risk level of about 0.32, according to the Constant Relative Risk Aversion (CRRA) coefficient, locating farmers of the region in a risk-averse group. The heterogeneity analysis showed that the socioeconomic factors and the perceptions of climate change are related to the farmers´ stated risk level. Farmers who are young women, with a tendency to use public support for structural investment, were shown to be risk-tolerant. Farmers considered floods, hail, diseases, pests, and weed growth incidences to be the most frequent weather patterns in the region.

Trends in Food Preferences and Sustainable Behavior during the COVID-19 Lockdown: Evidence from Spanish Consumers

“…Risk preference was a highly important factor in consumers' behavioral intention [71]. The MPL (Multiple Price List) has been widely used in psychology and economics research because of its easy and effective procedure, which was based on expected utility theory (EUT) [72,73]. Therefore, MPL was employed to measure consumers' risk preference in this research.…”

Is Technical Efficiency Affected by Farmers’ Preference for Mitigation and Adaptation Actions against Climate Change? A Case Study in Northwest Mexico

“…In the agricultural field, the decisions made by farmers are affected by their level of aversion to or tolerance of risk that is related to their farm management and crop cultivation strategy and periodicity. They are also related to farmers' attitudes toward the environment and their perception of climate change [12].…”

“…During the modeling stage, the problem is defined (i.e., identification of farmers' preferences for mitigation and adaptation actions). In this case, the appropriate criteria were identified from a literature review [12]. The identified criteria are shown in Table 1.…”

“…Therefore, identifying the most preferred adaptation and mitigation actions turns out to be highly valuable. These preferences not only depend on farming activities, regions, and farmers' characteristics [12], but also could be related to technical efficiency (TE) at the farm level [13]. Agricultural TE implies obtaining the maximum production or output by using the minimum resources or input [14].…”

Farmers’ Perception of Climate Change: A Review of the Literature for Latin America

“…Nonetheless, there is also evidence showing that, in other contexts, farmers might have similar perceptions of climate change irrespective of their age; that is the case for Southern Mexico (Meli et al, 2015). Meanwhile, results for Brazil (Funatsu et al, 2019), Peru (Altea, 2020), andMexico (Sánchez-Cortés andLazos, 2011;Orduño et al, 2019) show that women are less involved than men in agricultural activities and in general in decision making. Furthermore, they tend to be less perceptive of climate change, and, at least according to the evidence for Brazil and Peru, when they perceive it, they do not think of it as an anthropogenic phenomenon.…”