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TY - JOUR T1 - The predictive power of risk preference measures for farming decisions† AU - Hellerstein, Daniel AU - Higgins, Nathaniel AU - Horowitz, John Y1 - 2013/12/01 N1 - 10.1093/erae/jbs043 JO - European Review of Agricultural Economics SP - 807 EP - 833 VL - 40 IS - 5 N2 - This paper uses a lottery-choice mechanism to measure farmer preferences over money-denominated risks. We look at the ability of these choice data to predict farming decisions for an in-person sample of 68 farmers. A coarse version of our risk preference measure has substantial explanatory power but in an unexpected direction: a farmer who was more risk averse under our measure was less likely to have diversified his operation and less likely to have a crop insurance contract. A fine version of our risk preference measure has essentially no explanatory power. We conclude that despite their widespread use in the lab, lottery-choice measures of risk preferences are unproven for predicting real world farming behaviour. SN - 0165-1587 M3 - doi: 10.1093/erae/jbs043 UR - http://dx.doi.org/10.1093/erae/jbs043