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Using farm consumption data to estimate the intertemporal elasticity of substitution and relative risk aversion coefficients

Using farm consumption data to estimate the intertemporal elasticity of substitution and relative... A farm household consumption model based on the lifecycle permanent income hypothesis LPIH has been specified and the Euler equations derived in this analysis. Estimation of the of the Euler equations using farm household consumption data provided estimates for the intertemporal elasticity of substitution and the coefficient of relative risk aversion. These parameters differ among the farm enterprises in which the households were engaged. Estimates for the intertemporal elasticity of substitution and the coefficient of relative risk aversion ranged from 0.158 to 0.351 and from 2.849 to 6.329, respectively. Results also provide further evidence that the LPIH is valid for modeling farm household consumption. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Agricultural Finance Review Emerald Publishing

Using farm consumption data to estimate the intertemporal elasticity of substitution and relative risk aversion coefficients

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0002-1466
DOI
10.1108/00214690080001110
Publisher site
See Article on Publisher Site

Abstract

A farm household consumption model based on the lifecycle permanent income hypothesis LPIH has been specified and the Euler equations derived in this analysis. Estimation of the of the Euler equations using farm household consumption data provided estimates for the intertemporal elasticity of substitution and the coefficient of relative risk aversion. These parameters differ among the farm enterprises in which the households were engaged. Estimates for the intertemporal elasticity of substitution and the coefficient of relative risk aversion ranged from 0.158 to 0.351 and from 2.849 to 6.329, respectively. Results also provide further evidence that the LPIH is valid for modeling farm household consumption.

Journal

Agricultural Finance ReviewEmerald Publishing

Published: May 5, 2000

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