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Abstract

Farmers’ decision-making is affected by farm’s risk level and can result in technical as well as a locative inefficiency of using inputs. Thus, risk-programming approaches are recommended to evaluate and determine farmers’ risk aversion level. In the present study, using MOTAD model in the framework of multi-objective programming with objectives of maximizing expected return and minimizing mean deviation of expected return, farmers’ risk aversion coefficients were determined. In this set, assuming an equal importance for both objectives, the Max and Min of the expected return were 415789 and 382112 thousand rials, respectively. Since 83% of study farmers indicated the same importance for the mentioned objectives, therefore, based on the obtained equation from compromise risk programming, their risk aversion coefficient was 1.68. Furthermore, 17% of farmers showed same tendency toward maximizing expected return objective. Their risk aversion coefficient decreased to less than 1.68. For instance, if this group of farmers considered the objective of maximizing expected return, at least twice that of mean deviation expected return, their risk aversion coefficient was 0.84. Considering the obtained results, it can be concluded that the risk aversion of understudy farmers is high.

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