Risk-averse Attitude Research Articles

Modelling the maize marketed surplus behaviour under risk and time preference conditions: The case of Zvimba and Mokonde districts of Zimbabwe

The Heckman sample selection technique was applied in modelling the households’ maize marketed surplus decision under risk and time preference assumption. We assumed that maize returns depend on farmers’ market selection choices. We then applied the sample selection model to explain why maize surplus households shunned the uncertain, high-return state-owned Grain Marketing Board (GMB), with delayed payment system in favour of the more certain, low-return private buyer market, with immediate payment system. In the process, we tested whether the marketed surplus decisions followed a sequential or simultaneous decision process. Using survey data collected from 433 households from Zvimba and Makonde districts, the results confirmed that households followed a sequential decision process when selling through the private buyer market and a simultaneous decision process when selling through the GMB market. These findings implied two things; firstly maize surplus households could exercise some bargaining power in the private buyer market even if they got less. Secondly, in the presence of uncertainty and payment delays, high-return incentive offered through government parastatals may not be sufficient to attract maize surplus, as households may not sufficiently respond, due to risk aversion attitude and time impatient behaviour.

Citrus Specialization or Crop Diversification: The Role of Smallholder’s Subjective Risk Aversion and Case Evidence from Guangxi, China

Specialization may lead to higher income for small-scale farmers but comes with increased risks, while diversification can mitigate risks and foster agricultural sustainability. Considering the influences of complex risks and farmers’ subjective risk aversion, the decision for small-scale farmers to specialize in citrus cultivation or diversify with multiple crops remains uncertain. There is currently limited understanding of this issue among citrus smallholders in rural China. This study aims to fill this empirical gap by examining the impact of smallholder farmers’ subjective risk aversion on their choice between citrus monoculture and crop diversification. It utilizes a subjective risk assessment approach that incorporates farmers’ risk perceptions and risk attitudes towards citrus farming. Farm crop diversification is assessed through the utilization of both the count index and Shannon index. The empirical analysis employs survey data obtained from citrus growers in Guangxi, China, and applies an instrumental variable regression method with endogeneity consideration using the IV-Probit model and 2SLS model estimation. The results reveal that both risk perceptions and risk attitudes play important roles in citrus smallholders’ land allocation decisions. Specifically, citrus farmers who perceive higher risks and adopt risk-averse attitudes are statistically more inclined to engage in land use diversification practices, including the practice of growing citrus as well as other crops, which contributes to reducing the risks of citrus farming and promoting local environmental conservation. These results contribute to a better scholarly comprehension of the relationship between risk perceptions, risk attitudes, and crop diversification among small-scale citrus farmers. They provide valuable insights for enhancing the sustainability of land use systems with citrus farming while also emphasizing the importance of maintaining essential diversification in small-scale farming throughout the process of agricultural modernization.

Stochastic risk-embedded energy management of a hybrid green residential complex based on downside risk constraints considering home crypto miners, adaptive parking lots and responsive loads: A real case study

Hybrid energy systems can improve the economical and technical aspects of different infrastructures due to their high efficiency and flexibility. In this study, the energy management of a hybrid green residential complex composed of renewable resources, electric boiler/chiller, and electrical storage is optimized considering adaptive parking lots, home crypto miners, and responsive loads. Since the reliable operation of such structures requires accurate predictions, various parameters including local loads, solar radiation, wind speed, arrival/departure time of vehicles, initial charge of batteries, and price of markets are modeled using scenario generation procedures in the first step. Afterward, the downside risk method is applied to analyze the risk of decisions under the desired robustness level. The proposed planning is implemented on a real network and the simulations are compared with the conditional value-at-risk approach for validation. The results show that in a specified robustness level, the risk-averse attitude increases the cost by about 4.47%, whereas the obtained crypto currency by crypto miners is about 34.67% higher than the risk-neutral strategy due to the availability of local sources. Furthermore, the parking lots can act as bulk storage units and 10% of load flexibility decrease the cost by about 3.53%.

Impact of negative emotions on financial behavior: An assessment through general strain theory

Research background: The research has two objectives and employs a serial mediation approach. First, using the general strain theory, it examines the mediating role of negative feelings and impact of economic adversity on people's risk tolerance and prudent financial behavior. The second is determining the various categories' variations according to age. Purpose of the article: The study's main objective is to evaluate financial behaviour of people with lower and medium incomes after the second wave of COVID-19 in India, and to contribute to the body of knowledge on general strain theory. Methods: The study examined the proposed framework and tested the serial mediation model based on the general strain theory used as a survey method for data collection, targeting lower and middle-income individuals in India's most populated state. The study applied PLS-SEM to test the framed hypotheses. Furthermore, the Kruskal Wallis test was applied to identify the difference in the various groups classified based on age. Findings & value added: The results reveal that economic hardship significantly influences improved financial behavior. Risk aversion attitude, loneliness, and depression mediate the relationship between economic hardship and financial behavior. Moreover, the study found quite a few significant differences between the different age groups. The present study will add to the existing literature on financial behavior under the scope of general strain theory and probably be among the few that test general strain theory with financial variables impact on lower and middle-income group individuals from a developing nation in post-COVID-19 period.

Evaluation of maize farmers’ attitude towards risk management and preference for crop insurance in Nigeria

This study focused on evaluation of maize farmers’ attitude towards risk management and preference for crop insurance in Nigeria. Multi-stage method of sampling was used. One hundred (100) maize producers were sampled and selected. Primary sources of data were used for this study and the data were collected through the use of well-structured and well-designed questionnaire. Econometrics and statistical tools employed were used for data analysis. The results obtained show that 51% of maize farmers were risk averse, 21% were risk preferring, and 28% were risk neutral. Age, gender, and education level were statistically and significant predictors influencing risk averse attitudes of maize farmers. Age, farm size, household size, gender, risk aversion, education level, and access to agricultural extension services were the statistically and significant predictors influencing preference of maize farmers for crop insurance policy. Garrett index ranking technique employed for risk management strategies and crop insurance policy adopted by maize farmers show that crop diversification was ranked 1st, weather information was ranked 2nd, crop insurance was ranked 3rd, and off-farm activities was ranked 4th respectively. The results of constraints faced by maize producers revealed that lack of extension services was ranked 1st, lack of credit facilities was ranked 2nd, inadequate knowledge of agricultural insurance was ranked 3rd, high premium of agricultural insurance was ranked 4th, while lack of fertilizer was ranked 5th respectively. The constraints retained explained 74.85% of all constraints in the analysis. The study recommends that extension officers should be employed to disseminate research results, innovations and information on risk management strategies and crop insurance to maize farmers. Weather information should be made available to maize farmers, and credit facilities at low interest rate should be provided to maize farmers. Bureaucratic process and cumbersome administrative procedures in accessing credit facilities should be removed.

How do contract performance rates affect entrepreneurs' risk-averse attitudes? Evidence from China.

Entrepreneurs' attitudes toward risk is one of the most critical factors influencing business growth and economic development. Therefore, addressing the influencing factors and formation mechanisms of entrepreneurs' risk attitudes has become a crucial research endeavor. In this paper, we examine how contract performance rates affect entrepreneurs' risk attitudes through the mediating effect of subjective well-being as well as assess the moderating effect of the regional business environment on this relationship. The ordered probit regression technique was employed to analyze the data obtained from 3,660 sampled respondents from the 2019 China Household Finance Survey. All analysis was performed using Stata 15.0. The empirical results show that contract performance rates have a substantial positive indirect effect on entrepreneurs' degree of risk aversion through improved subjective well-being. The regional business environment plays a negative regulatory role in the relationship between contract performance rates and entrepreneurs' risk aversion. Furthermore, urban-rural heterogeneity appears to consistently determine the extent of the influence of contract performance rates on entrepreneurs' risk attitudes. To reduce entrepreneurs' risk aversion and enhance social and economic activity, the government should improve regional business environments by taking specific measures. Our study contributes to the empirical understanding of entrepreneurs' investment decisions in the context of urban and rural environments.

Optimal joint decisions of production and emission reduction considering firms’ risk aversion and carbon tax rate

Carbon tax represents governments’ approach to steering the economy towards a greener future. Our research question focuses on the impact of carbon tax policy on a firm’s production decision and revenue and on total social welfare. In particular, we assume that a firm’s decision is subject to its behavioural considerations or, in other words, its risk attitude. We model a government plan to charge a carbon tax, and a risk-averse (or risk-neutral) firm needs to plan its production and estimate its profit if the carbon tax policy is implemented. We show that it is possible for a risk-averse firm’s optimal profit, in some cases, to be higher than that of a risk-neutral firm when facing a carbon tax. This implies that the risk-averse attitude is not necessarily harmful to the firm’s profit. For operations management scholars, our model highlights the importance of integrating firms’ behavioural responses into the carbon tax price. Our model suggests that for governments to implement carbon tax policy effectively, they should make carbon prices vary under certain conditions and not worry about price variation antagonising firms at large.

Risk Aversion and Perception of Farmers about Endogenous Risks: An Empirical Study for Maize Producers in Awi Zone, Amhara Region of Ethiopia

Agriculture is a risky business that is subject to endogenous risks. Endogenous risks caused by input utilization, input affordability and input availability may prove detrimental to the production potential of farmers. The study was aimed at examining the risk perception, risk aversion and risk management strategies of maize producers in Awi zone, which is found in the northwest part of Ethiopia. The study involved 343 respondents who produced maize under risk. Descriptive statistics, a seven-point Likert scale, the observed economic behaviour method, factor analysis and a seemingly unrelated regression model were used to process the data. The results showed that farmers have different perceptions of the endogenous risk associated with input availability and input affordability which has a different probability of occurrence and severity of damage. The observed economic behaviour method showed that farmers in the area also have different risk aversion behaviours: about 7.29% of the respondents in the study area have high risk aversion attitudes, while about 30.61% have medium risk aversion attitudes and 62.10% of them have low risk aversion attitudes. The seemingly unrelated regression model output showed that farmers’ economic, social, demographic and institutional factors, as well as their risk behaviour, determine the risk management strategies that they employ. Maize farmers in the area applied human risk management strategies, production risk management strategies, diversification, financial risk management strategies and marketing risk management strategies to tackle the endogenous risks in the area. It was deduced that maize farmers have a risk averse behaviour even if their risk aversion levels differ based on the scope of the management strategies that they employ to combat risk. Following the finding of the study, a holistic approach to risk management that encompasses all actors, such as farmers, researchers, extension services and financial institutions should be involved to make the appropriate interventions.

A critical review of FOMO behaviour among young investors

The fear of missing out (FOMO) is the emotional feeling of missing out on the opportunity to gain a fulfilling experience. FOMO is a behavioural trait that influences an individual’s decisions such as utilising social media, adopting new technology, crowdfunding, and investing in the equity market. Young investors with FOMO behaviour might mimic what other investors do in fear of missing out on the opportunity for a higher return in the financial market. The purpose of this paper is to understand the concept of FOMO and review what researchers have discovered about FOMO behaviour among young investors. Based on these recent findings on FOMO behaviour, it can be concluded that a volatile market, risk-averse investors, and perceived market efficiency are critical factors of FOMO behaviour among young investors. The risk-averse attitude, subjective norms of perceived market efficiency and perceived control behaviour during market volatility could be examined based on the TPB model.

Mitigating bureaucratic inefficiencies through blockchain technology in Africa

With the Fourth Industrial Revolution (4IR) wave engulfing African governments, the need to do, and use something new has already infiltrated many public sector organizations. While modern technologies are being embraced in the private sector, African governments are emulating new technologies and other Information Communication Technologies (ICTs) to advance their economies while managing the risk that these sophisticated technologies can trigger. Blockchain technology is one of the emerging 4IR technology that is believed to have the capacity to mitigate bureaucratic inefficiencies, although scholars argue implementing such comes at a higher price. To understand how blockchain can help reduce inefficiencies in African bureaucracy, the researchers employed the systematic literature review analysis where documents from various databases such as Scopus, Web of Science, and Google Scholar were systematically sampled depending on how they offer meaningful data concerning blockchain implementation. The analyses of these secondary sources revealed multiple challenges and opportunities associated with blockchain technology in the African government. The challenges include poor project management, weak institutions that do not uphold accountability and transparency in data entry using blockchain, unavailability of blockchain infrastructure, risk-averse attitude, and absence of institutional readiness. By implementing enabling technology policies in government, the study revealed that blockchain could help improve taxation in African bureaucracies and mitigate data altering and errors while maximizing efficiency. Further merits in public healthcare and education can be realized by using blockchain technology. The conclusions drawn from this study have shown that for African bureaucracy to thrive using blockchain technology, there is a need to prepare public sector institutions to embrace blockchain technology. At the same time, investment in soft and technical skills remains fundamental to mitigate inefficiencies in public service provision. Institutional readiness is another deterrent to blockchain technology as public administration regard this technology as demanding since it may require change, and management where institutions and structures are reshuffled to respond to the demands of blockchain technology in the delivery of public goods.

Two-stage distributionally robust optimization for disaster relief logistics under option contract and demand ambiguity

Disaster relief logistics (DRL) provides adequate relief supplies to victims of natural disasters (e.g., earthquakes and volcanic eruptions). This study explicitly considers supplier selection and inventory pre-positioning corresponding to static preparedness decisions, and post-disaster procurement and delivery associated with dynamic response decisions in actual DRL operations. To tackle issues triggered by shortage and surplus of multi-class relief resources, a flexible option contract is adopted to purchase relief items from suppliers. To measure the risk of demand ambiguity, a worst-case mean-quantile-deviation criterion is introduced to reflect the decision-maker’s risk-averse attitude. To handle the ambiguity in the probability distribution of demand, a novel two-stage distributionally robust optimization (DRO) model is developed for the addressed DRL problem. The proposed DRO model can be transformed into equivalent mixed-integer linear programs when the ambiguity sets incorporate all distributions within L1-norm and joint L1- and L∞-norms from a nominal (reference) distribution. A computational study of earthquakes in Iran is conducted to illustrate the applicability of the proposed DRO model to real-world problems. The experimental results demonstrate that our proposed DRO model has superior out-of-sample performance and can mitigate the effect of Optimization Bias compared to the traditional stochastic programming model. Some managerial insights regarding the proposed approach are provided based on numerical results.

Objectivization of virus titration method in GMP-regulated environment using artificial intelligence-based classification system

The implementation of artificial intelligence-based systems (AI) into highly regulated industries faces significant regulatory and logistical challenges. The lack of established practices and guidelines, risk aversion attitude, perception of AI technology as insufficiently tested and unreliable are among the most important factors preventing wider adoption of AI solutions into pharmaceutical industry. Here we demonstrate by an example development and validation of neural network-based computer vision systems for binary classification of results from virus titration assays often used in research and production of vaccines and antivirals. The systems were shown to effectively classify images of cells from the titration assays to negative (non-infected) or positive (virus infected) with an accuracy of over 99%. The methods have been validated according to GMP principles and related guidelines. Regulatory and logistical challenges of implementation of AI-based solutions into GMP-compliant systems are discussed. Although the implementation of AI-systems into GMP-regulated environment brings specific challenges related to introduction of novel technologies, future benefits for early adopters could outweigh the initial efforts.

Factors affecting attitude towards risk: The case of small-scale fishers in Guimaras

The presence of risk and uncertainty in the field of capture fisheries warrants an understanding of how small-scale fishers respond to these uncertainties. Previous studies showed that fishers’ decision-making process is influenced by various factors, including their risk preference. Studies on this subject are scarce despite the relative importance of risk preference in explaining small-scale fisher’s behavior. This study used a multiple price list experiment to elicit small-scale fisher’s risk preference in Guimaras province and employed multinomial logit regression to determine socioeconomic factors influencing risk preference. The results showed that small-scale fishers are slightly risk-averse given the mean Constant Relative Risk Aversion (CRRA) coefficient of 0.20. This risk-averse attitude is significantly influenced by monthly household income, being a Pantawid Pamilyang Pilipino Program (4P’s) beneficiary, and having outstanding credit. Therefore, the risk-averse attitude of small-scale fishers is an essential consideration in implementing fishery regulations and poverty alleviation programs.

Influence of Major Adverse Events on Procedural Selection for Percutaneous Coronary Intervention: Insights From the Veterans Affairs Clinical Assessment Reporting and Tracking Program.

Public reporting of percutaneous coronary intervention (PCI) outcomes has been associated with risk-averse attitudes, and pressure to avoid negative outcomes may hinder the care of high-risk patients referred for PCI in public reporting environments. It is unknown whether the occurrence of PCI-related major adverse events (MAEs) influences future case selection in nonpublic reporting environments. Here, we describe trends in PCI case selection among patients undergoing coronary angiography following MAEs in Veterans Affairs (VA) cardiac catheterization laboratories participating in a mandatory internal quality improvement program without public reporting of outcomes. Patients who underwent coronary angiography between October 1, 2010, and September 30, 2018, were identified and stratified by VA 30-day PCI mortality risk. The association between MAEs and changes in the proportion of patients proceeding from coronary angiography to PCI within 14 days was assessed. A total of 251,526 patients and 913 MAEs were included in the analysis. For each prespecified time period of 1, 2, and 4 weeks following an MAE, there were no significant changes in the proportion of patients undergoing coronary angiography who proceeded to PCI within 14 days for the overall cohort and for each tercile of VA 30-day PCI mortality risk. There were no deviations from routine PCI referral practices following MAEs in this analysis of VA cardiac catheterization laboratories. Nonpublic reporting environments and quality improvement programs may be influential in mitigating PCI risk-aversion behaviors.

317 Preoperative Fasting in Adults – A Quality Improvement Project at Macclesfield District General Hospital

Abstract Aim Our primary endpoint was to evaluate staff awareness of preoperative fasting guidelines. Our secondary endpoint was to evaluate patient preoperative fasting times. Method Data were collected using online close-ended survey questions from surgical ward nurses and healthcare assistants before and after implementing a multimodal campaign to raise awareness. Data were collected for patient fasting times before and after the same interventions. Interventions: Results Staff: Our interventions increased staff awareness of preoperative fasting guidelines for food by 20.6% (from 50% to 70.6%) and for clear fluids by 28.8% (30% to 58.8%). Patients Average preoperative fasting times for food before and after intervention were 12.7 and 12 hours respectively (p=0.736). For clear fluids, average fasting times before and after intervention were 6.2 hours and 4.5 hours (p=0.415). Conclusions Staff were generally unaware of the guidelines and viewed preoperative fasting solely as a safeguard against aspiration, causing adoption of a risk-averse attitude. The benefits of adequate hydration and nutritional support before surgery were overlooked. Our interventions helped raise awareness in the short term. For our next cycle, we plan to assess the efficacy of implementing long-lasting changes such as local trust guidelines and improved staff training to drive a change in attitude and awareness of preoperative fasting.

Agricultural Supply Chain Financing Strategies under the Impact of Risk Attitudes

Bank and e-commerce financing strategies are the main ways for farmers to solve the problem of capital shortage. Aiming at the uncertainty risk of the output of the agricultural product supply chain, we consider the risk attitudes of farmers; construct the Stackelberg game model under different financing strategies to obtain the optimal decision of e-commerce and farmers; and explore the expected output factors, the degree of farmers’ risk aversion, e-commerce’s interest rates on the decision-making results. Our research found that farmers with low-risk aversion prefer to choose the e-commerce financing strategy when the e-commerce’s interest rates are lower. In addition, farmers’ risk-averse attitudes lead to lower equilibrium decision-making between farmers and e-entrepreneurs, which is not conducive to the interests of e-commerce and farmers. A higher expected output factor reduces farmers’ production inputs and e-commerce purchase price. When the expected output factor is low, the decision of whether e-commerce provides financing services to farmers is only affected by interest rates, and lower interest rates create more value for e-commerce.

Modeling the effects of government subsidy and regulation on BOT transport project contract design within contractible service quality

Government subsidy and regulation are frequently employed to encourage the private sector to participate fully in Build-Operate-Transfer (BOT) transport projects. Besides service charge, the service quality of BOT transport project (i.e., maintenance quality, toll service, operational monitoring, emergency management, safety management and so on) is also an important factor affecting the choice of users. This paper studies the optimal service quality decisions in both concession period (CP) and post-CP, in which we assume that the market demand is dependent on both service price and service quality. Firstly, in the absence of subsidy scheme, we derive the related players’ optimal decisions of toll charge, contractible service quality, project capacity and length of CP in the BOT contract design process. Secondly, we investigate how to design an optimal BOT transport project contract when the government subsidizes the private sector. Thirdly, we explore the effects of government regulation policies (i.e., price cap regulation and service quality floor regulation) on the BOT contract design. Finally, we make three extensions to further examine the impacts of the demand uncertainty, the risk-aversion attitude of private sector, the asymmetric cost information and the nonlinear demand function on the BOT contract design. From our model results, some policy implications are derived regarding BOT transport project contract design when the service quality is a fundamental contractible variable.

The effect of COVID-19 on tourists' attitudes and travel intentions: an empirical study on camping/glamping tourism in Turkey during COVID-19

PurposeIn this study, visitors' attitudes and behavioural intentions towards camping/glamping tourism in Turkey during the pandemic were investigated using the extended theory of planned behaviour (TPB). The model has been extended to include constructs such as risk perception and risk aversion attitudes that stem from COVID-19 to predict visitors' attitudes and behavioural intentions.Design/methodology/approachThe data were collected through an online questionnaire from 432 participants who have experience and interest in camping/glamping tourism in Turkey. The responses were analysed using the structural equation modelling (SEM).FindingsThe findings show that besides the basic TPB structures, other added variables also significantly affect visitors' attitudes and intentions. Moreover, it has been observed that the risk perception and risk aversion attitude derived from COVID-19 increase negative emotions in visitors and decreased behavioural intentions.Research limitations/implicationsThe results of the study are discussed for future research as well as its academic and practical implications.Originality/valueThis theoretical expansion is thought to increase the theory's predictive power in predicting visitors' behaviour during the pandemic.

Dual-Source Procurement Strategy of Cross-Border E-Commerce Supply Chain considering Members’ Risk Attitude

The risk attitude of decision-makers will significantly affect the decision-making of enterprise risk management. Specifically, high risk represents the potential premise of high return for risk preference decision-makers, and for risk-averse decision-makers, the increase of risk degree will stimulate decision-makers’ aversion to uncertainty and turn to seek safer business strategies. Although there are many pieces of literature on the risk preference of decision-makers, they usually only assume the risk attitude of one party and rarely consider the risk attitude of suppliers and retailers in the scenario of cross-border e-commerce at the same time. Therefore, under the background of supply disruption, for the cross-border e-commerce supply chain composed of cross-border suppliers, overseas suppliers, overseas retailers, and consumers, combined with the risk attitude preference of enterprise subjects, this paper constructs the mean-variance model dominated by overseas retailers and reversely solves the risk-aversion attitude of a single cross-border supplier. When a single overseas retailer maintains a risk-aversion attitude and both cross-border suppliers and overseas retailers hold a risk-neutral or risk-aversion attitude, the pricing of products in different channels is analyzed. Finally, an example is given to analyze the impact of supply disruption probability, risk-aversion coefficient, channel distribution coefficient, and other parameters on purchase price, market demand, target profit, and utility. It is of great practical significance for improving the stability of cross-border e-commerce supply chain system and reducing revenue loss to study how different degrees of risk-aversion attitudes of cross-border suppliers and overseas retailers affect enterprise procurement pricing strategy, target profit, and utility in case of supply disruption.

Risk perceptions and risk-averse attitude influenced older patients' first-diagnosis-seeking behaviour at tertiary hospitals.

This qualitative study aimed to investigate the associations of older patients' inappropriate healthcare-seeking behaviour at tertiary hospitals in China with their risk perceptions and attitude. The study was based on nine focus group interviews (involving 41 older patients, with three to six per group) and involved the grounded theory method. The participants were recruited at tertiary hospitals. The results of this study showed that older patients' inappropriate first-diagnosis-seeking behaviour at tertiary hospitals was impacted by their risk perceptions and risk-averse attitude. Both external factors (family/friends and the Internet) and internal factors (preferences and habits) had played important roles in related processes. Thus, to guide older patients' healthcare-seeking behaviour, changing the thoughts and behaviour of the older patients themselves, their spouses, adult children, other relatives, and friends are all important. More attention should be paid on guiding appropriate risk perceptions and attitude regarding lower-level medical institutions, increasing their preferences and habit formation regarding lower-level medical institutions, enhancing older patients' social support and improving and standardising online health information. These are important for the future development of the hierarchical medical system in China.