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Heterogeneous and Correlated Risk Preferences in Commercial Fishermen: The Perfect Storm Dilemma

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Abstract

Commercial fishing involves both physical and financial risks. This combination questions whether fishermen are inherently risk-loving, whether physical and financial risk preferences are correlated, and how much preferences vary across fishermen. This paper addresses these questions with a panel data set of daily participation decisions in the California sea urchin dive fishery. Weather buoy data and the prevalence of great white sharks at a particular fishing site proxy for physical risk. Overall, urchin fishermen are not risk-loving on average, risk preferences are heterogeneous, and there is some evidence that risk preferences are positively correlated across physical and financial domains.

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Authors and Affiliations

  1. Nicholas School of the Environment and Earth Sciences, and Department of Economics, Duke University, Box 90328, Durham, NC, 27708

    Martin D. Smith

  2. Department of Agricultural and Resource Economics, University of California, Davis, One Shields Avenue, Davis, CA, 95616

    James E. Wilen

Authors
  1. Martin D. Smith
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  2. James E. Wilen
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Correspondence to Martin D. Smith.

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JEL Classification: Q22, D81

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Smith, M.D., Wilen, J.E. Heterogeneous and Correlated Risk Preferences in Commercial Fishermen: The Perfect Storm Dilemma. J Risk Uncertainty 31, 53–71 (2005). https://doi.org/10.1007/s11166-005-2930-7

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  • DOI: https://doi.org/10.1007/s11166-005-2930-7

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