The Relationship between Farmers' Shock Experiences and their Uncertainty Preferences - Experimental Evidence from Mexico

A farmer’s uncertainty preferences can play a large role in how he makes production decisions on the farm. We attempt to understand how farmers’ household characteristics as well as past harvest shocks affect uncertainty preferences of maize farmers in southern Mexico. By using a series of incentivized lottery games, we estimate coefficients that correspond to Cumulative Prospect Theory, namely the probability weighting function, the curvature of the value function and loss aversion, along with a coefficient for ambiguity aversion. These are estimated controlling for survey data of sociodemographic characteristics as well as maize harvest losses incurred between 2012-2014. Our results provide evidence that having experienced more severe harvest losses leads to more risk aversion and stronger overweighting of small probabilities. Higher losses are not related to loss aversion or ambiguity aversion

Predicting People’s Motivation to Engage in Urban Possum Control

Initiatives such as education, incentives, and regulations are used to change people’s behaviour and thereby achieve policy objectives. Understanding and predicting the willingness of people to change their behaviour in response to an initiative is critical in assessing its likely effectiveness. We present a framework proposed by Kaine et al. (2010) for understanding and predicting the motivation of people to change their behaviour in response to a policy initiative. The framework draws on the marketing concept of ‘involvement’, a measure of motivation. Through application to a predator control case study, we show how the framework may be used to predict people’s responses to a policy initiative and how these predictions might help agencies develop strategies to promote behaviour change