Stability of risk attitude, agricultural policies and production shocks: evidence from Italy

Abstract

This article investigates the stability of farmers' risk attitude over time. To this end, we estimate responses to changes in agricultural policies and production shocks. We use a unique panel data of over 36,000 Italian farms specialised in cereals, during the period 1989-2009. We find evidence of risk preference changes over time in response to changes in the European Union Common Agricultural Policy and possibly after a drought-induced production shock.