Assessing and modelling catastrophic risk perceptions and attitudes in agriculture: a review

Catastrophic risks result in high losses in agriculture. To cope with such losses farmers need to apply risk management strategies to balance their profits and risks. Therefore risk assessment and risk modelling are important to support farm-level decision-making. This paper (1) reviews the techniques to elicit risk perception and risk attitude, and (2) describes how the simultaneous impact of risk perception and risk attitude could be accounted for in risk programming. Although inherent in catastrophic risks, objective data are sparse and eliciting subjective data is likely to be flawed. The review shows that the negative impact resulting from catastrophes cannot be ignored without compromising the optimal decision.