Farmers' risk preference and fertilizer use

This study examines the role of farmers' risk attitudes toward fertilizer use in cotton production in China. Contradicting previous studies, this paper theoretically shows that the relationship between farmers' risk aversion and fertilizer use is not always monotonic. Field survey data were collected to test this relationship using the Cobb-Douglas production function. Results suggest that when the elasticity of fertilizer use and the probability of achieving the desired effects from fertilizer use are high, risk-averse farmers apply more fertilizer than risk-taking farmers. Conversely, when the elasticity of fertilizer use and the probability of achieving the desired effects are low, risk-taking farmers apply more fertilizer than risk-neutral or risk-averse farmers.

Automated summary

This study examines the role of farmers' risk attitudes towards fertilizer use in cotton production in China. Contrary to previous studies, it theoretically demonstrates that the relationship between farmers' risk aversion and fertilizer use is not always linear. Field survey data was collected to test this relationship using the Cobb-Douglas production function. Results indicate that under certain conditions, risk-averse farmers apply more fertilizer than risk-taking farmers, while under different conditions, risk-taking farmers apply more fertilizer than risk-neutral or risk-averse farmers.