Students and professors at the University of Arkansas-Little Rock are studying farmer's reactions to drought conditions.
The university received a national grant to study how farmers' risk preferences affect water use during droughts.
Kent Kovacs, associate professor of accounting, economics and finance at the university, said they want to determine if farmers will take a more conservative approach or be influenced by economic factors.
"You can have a string of generally very dry years or you could have a string of very wet years," Kovacs pointed out. "How they respond depends upon what their preference is for taking risks in their farming business."
The three-year study will determine if risk preferences change with drought conditions and climate change. Farmers in rural Arkansas, the Lower Mississippi River Basin, Louisiana and part of Missouri are included in the research.
As part of the study, farmers are surveyed and their risk preferences entered into economic and hydrologic models. If the models show the water supply is declining quickly, policy changes could be suggested.
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