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Environmental Modeling & Assessment

, Volume 22, Issue 6, pp 563–576 | Cite as

Attitude Towards Risk and Production Decision: an Empirical Analysis on French Private Forest Owners

  • Marielle Brunette
  • Jérôme Foncel
  • Eric Nazindigouba Kéré
Article

Abstract

This paper deals with the forest owner’s attitude towards risk and the harvesting decision in several ways. First, we propose to characterize and quantify the forest owner’s attitude towards risk. Second, we analyze the determinants of the forest owner’s risk attitude. Finally, we determine the impact of the forest owner’s risk attitude on the harvesting decision. The French forest owner’s risk attitude is tackled by implementing a questionnaire, including a context-free measure borrowed from experimental economics. The determinants of the forest owner’s risk attitude and harvesting decision are estimated through a recursive bivariate ordered probit model. We show that French forest owners are characterized by a relative risk aversion coefficient close to 1 with a DARA assumption. In addition, we find that the forest owner’s risk aversion is influenced positively and significantly by the level of risk exposure, the geographical location of the forest and the fact to be a forester, and negatively by the income. Finally, we obtain that the forest owner’s risk aversion has a positive and significant impact on the harvesting decision.

Keywords

Forest owner’s risk attitude Risk aversion Harvesting decision Simultaneous equation models Experimental elicitation 

Notes

Acknowledgments

We are grateful to the European project Newforex, the National Institute of Geographic and Forest Information (IGN), and Région Lorraine that funded the survey. The UMR Economie Forestière is supported by a grant overseen by the French National Research Agency (ANR) as part of the “Investissements d’Avenir” program (ANR-11-LABX-0002-01, Lab of Excellence ARBRE). Finally, this work has benefited from the support of the Agence Nationale de la Recherche of the French government, through the program “Investissements d’avenir” (ANR-10-LABX-14-01).

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Copyright information

© Springer International Publishing AG 2017

Authors and Affiliations

  • Marielle Brunette
    • 1
  • Jérôme Foncel
    • 2
  • Eric Nazindigouba Kéré
    • 3
  1. 1.UMR INRA - AgroParisTech, Laboratoire d’Economie ForestièreNancy CedexFrance
  2. 2.Université Lille 3 Charles-de-Gaulle, UFR de mathématiques, sciences économiques et socialesVILLENEUVE D’ASCQ CEDEXFrance
  3. 3.African Development BankAbidjanCôte d’Ivoire

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