STABILISATION AND RISK REDUCTION IN AUSTRALIAN AGRICULTURE*Quiggin, John C.; Anderson, Jock R.
doi: 10.1111/j.1467-8489.1979.tb00243.xpmid: N/A
Agricultural producers typically are faced with risk about the yields they will experience and the prices they will receive. Stabilisation schemes can spread risk and thereby reduce the risk faced by individual producers. The risk‐reducing capacity of a scheme and the cost of risk reduction depend upon the design of the scheme. In particular, it is important to distinguish between risk and instability. A classification of scheme designs is presented to bring out the effects of various design types. Schemes for the wheat industry are given most attention.
OPTIMAL BUFFER STOCK POLICIES FOR WHEAT AT THE WORLD LEVELKennedy, John O.S.
doi: 10.1111/j.1467-8489.1979.tb00241.xpmid: N/A
Alternative wheat storage policies which maximise the expected present value of returns for consumers, producers, a monopoly storage agency and society as a whole are derived using a dynamic programming model. Results are compared with those from an earlier simulation model, and are found to justify higher investment in storage capacity compared with that suggested by the simulation model. The model is extended to derive optimal storage policies if production follows a stochastic cobweb process.
EMPIRICAL TESTS OF SPATIAL AND STRUCTURAL EFFECTS ON CATTLE AUCTION PRICESHogan, J.C.; Todd, Mike C.
doi: 10.1111/j.1467-8489.1979.tb00242.xpmid: N/A
Two investigations are reported. The first is a comparison of average prices for two cattle types within pairs of some major auction centres in Australia. Significant price differences existed in three of the four cases studied. The second is a study of the main determinants of price differences between auction selling centres through a case study of a large and small auction centre. The major factor explaining the price differences between the two auction centres was lot size. This factor also influenced price variation within auctions. The number of buyers purchasing cattle did not affect price levels.
THE DEMAND FOR MEAT — AN EXAMPLE OF AN INCOMPLETE COMMODITY DEMAND SYSTEM*Fisher, Brian S.
doi: 10.1111/j.1467-8489.1979.tb00245.xpmid: N/A
Equations describing the demand for beef and veal, mutton, lamb, pork and chicken are estimated using the full information maximum likelihood estimator. Elasticity estimates are presented and the double logarithmic model is compared with a demand system which is derived from the indirect translog utility function. Estimates of the direct price and income elasticities are not particularly sensitive to model specification but the estimated cross‐price elasticities are sensitive to the choice of functional form. The results indicate that the double logarithmic specification may be less satisfactory than the alternative presented in cases where restrictions on the parameters are imposed during estimation.
THE USE OF A DECISION MAKER'S UTILITY FUNCTION IN A LINEAR PROGRAMMING ANALYSIS OF AGRICULTURAL POLICY*Parton, Kevin A.
doi: 10.1111/j.1467-8489.1979.tb00244.xpmid: N/A
A decision theoretic approach to agricultural policy decision making is examined to discover whether a utility function of an Australian Wool Corporation decision maker can be established and, if so, whether this can be used to improve the policy analysing performance of an agricultural sector linear programming model. After discussing the theoretical requirements of the utility function elicitation and the elicitation procedures, the characteristics of the resulting functions are examined. A means for its inclusion in a linear programming framework is described and some analysis of policy is carried out. The general conclusions are that the relevance of the agricultural sector analysis is enhanced by the use of such a utility function.