Abstract:
The most commonly used utility functional forms are reviewed and their properties
compared. Then, using data collected from West Azarbaijan province, utility functions
are estimated and absolute risk aversion coefficients measured. Exponential and expopower
utility functions classified all farmers as risk averse, but quadratic and cubic utility
functions classified 75% and 65% of farmers as risk-averse, respectively. Findings in this
study indicated that alternative utility functions may classify farmers’ risk attitudes in
different ways.
