1.Although income variation will be the key variable to analyse the differences of risk management styles. What else could be drawn from income variable?
2.Can the market value of produced milk also serve the purpose? where income estimation is a problem.
I assume that the purpose of your survey is to measure dairy farmers' perceptions of the sources of risk (e.g. whether they perceive production risks, market risks or institutional risks as the most important, and which types of risk they worry about under each of these headings) rather than their risk preferences (e.g. how risk averse they are). In this context, I would agree with Francois Lategan that income and income variability is more the outcome of the interplay of various risk factors rather than a source of risk in itself (however, price or input cost volatility may be perceived as the risk source). However, you may be interested to ask if higher-income dairy farmers have different perceptions of the sources of risk than lower-income dairy farmers, so the income variable could be used to divide your sample. If you do not have good income data, then comparing risk perceptions across dairy farms of different sizes could be a good proxy.
Thank you very much Dr francois lategan and Dr alan mathews for your response. And Dr alan you understood it totally right about the work i am doing. Thanks for your response.
Though on some degree you can use the income variation for risk management yet it has to be supported we other indicators like experience wealth status or saving unless it will highly debatable to correlate the results. From income you can draw market trend, household capacity to save ( precautionary saving etc), consumption change, nutritional change at the household level. Yet it will be more interesting to correlate it with price so that it can give the fluctuation at the consumption and other macro parameters.
Converting the production at specific measurement with the market value you can get the gross income
Income variation may be seasonal or daily. We can measure risk through variability in income. It can be cope up with diversification.
income and risk taking is correlated. we can find interesting answers for the same. for risk factor , decision making behaviour could also be measured
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