The cost of agricultural production risk
| dc.creator | Babcock, Bruce A. | |
| dc.creator | Shogren, Jason F. | |
| dc.date | 2017-04-01T13:54:46Z | |
| dc.date.accessioned | 2026-07-09T08:09:23Z | |
| dc.description | We examine the relative influence of preferences and technology on producers' ex ante willingness to pay for a reduction in production risk. A risk averse producer pays both an Arrow-Pratt risk premium to stabilize income and a 'production premium' to stabilize yield. Using soil-nitrate risks as our motivating example, we demonstrate that the production premium accounts for 40-85% of producers' willingness to pay for risk reduction. These results demonstrate the relative importance of technology over risk preferences when estimating the costs of agricultural production risk. | |
| dc.identifier | doi:10.22004/ag.econ.173576 | |
| dc.identifier | https://ageconsearch.umn.edu/record/173576/files/agec1995v012i002a003.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/173576 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/596108 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/173576 | |
| dc.title | The cost of agricultural production risk | |
| dc.type | Text |