Risk Attitudes of Subsistence Farmers in Northeast Brazil: A Sampling Approach

Abstract Mind experiments involving choice between risky and sure farm alternatives were used to assess risk attitudes of samples of small farm owners and sharecroppers in Brazil. Results indicate that most subsistence farmers are risk averse, and that risk aversion tends to be more common and perhaps greater among owners than sharecroppers. In an expected utility context, distribution of risk attitude coefficients (based on mean‐standard deviation, mean‐variance, and exponential utility functions) was diverse and not necessarily well represented by an average sample value. Econometric analysis indicated that income level and perhaps other socioeconomic variables influence risk attitude.