Cost-oriented evaluation of ecosystem services under consideration of income risks and risk attitudes of farmers

•We analyzed trade-offs between incomes, the faunistic diversity and risks.•We calculated compensation claims for the participation in environmental measures.•Risk aversion may significantly affect the farmers' compensation claims.•Risk aversion may be a reason for the low acceptance of environmental measures.•Risk aversion does not necessarily reduce the adoption of environmental measures.

Agri-environmental measures are often not as accepted among farmers as is expected. The present study investigates whether changes in income risks and the individual risk attitudes of farmers may constitute an explanatory approach for the low acceptance of the measures. For this purpose, a normative model is developed that calculates the premia claimed by the farmers for adopting environmental measures under the consideration of income risks and different risk attitudes. We apply this model to environmental measures aiming at an increase of the faunistic diversity of species on grassland and showing that changes in income risks and the decision makers' risk attitudes can significantly influence farmers' minimum compensation claims.