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Empirical Challenges for Risk Preferences and Production

Empirical Challenges for Risk Preferences and Production The importance of risk preferences in agricultural production has long been identified as an important and preeminent issue of policy relevance. Recent developments in the study of production risk have called into question much of the core of risk production research. This article provides an overview of the prominent literature attempting to quantify the impact of risk preferences on production and a discussion of the recently discovered challenges. These challenges are typified by ( a ) an inability to discern risk preferences, ( b ) an inability to discern the factors that relate to risk preferences, ( c ) evidence that prior estimation has severe problems, and ( d ) a general failure of current models to address the important policy or behavioral issues. Although some of these challenges may appear at first blush to be insurmountable, we suggest a new agenda for risk research in production that directly addresses each of these issues. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Annual Review of Resource Economics Annual Reviews

Empirical Challenges for Risk Preferences and Production

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References (79)

Publisher
Annual Reviews
Copyright
Copyright © 2010 by Annual Reviews. All rights reserved
ISSN
1941-1340
eISSN
1941-1359
DOI
10.1146/annurev.resource.012809.103902
Publisher site
See Article on Publisher Site

Abstract

The importance of risk preferences in agricultural production has long been identified as an important and preeminent issue of policy relevance. Recent developments in the study of production risk have called into question much of the core of risk production research. This article provides an overview of the prominent literature attempting to quantify the impact of risk preferences on production and a discussion of the recently discovered challenges. These challenges are typified by ( a ) an inability to discern risk preferences, ( b ) an inability to discern the factors that relate to risk preferences, ( c ) evidence that prior estimation has severe problems, and ( d ) a general failure of current models to address the important policy or behavioral issues. Although some of these challenges may appear at first blush to be insurmountable, we suggest a new agenda for risk research in production that directly addresses each of these issues.

Journal

Annual Review of Resource EconomicsAnnual Reviews

Published: Oct 10, 2010

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