Empirical Challenges for Risk Preferences and Production

Posted: 19 Oct 2010  

David R. Just

Cornell University - Dyson School of Applied Economics and Management

Sivalai V. Khantachavana

Cornell University

Richard E. Just

University of Maryland - Department of Agricultural & Resource Economics

Date Written: October 2010

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.

Suggested Citation

Just, David R. and Khantachavana, Sivalai V. and Just, Richard E., Empirical Challenges for Risk Preferences and Production (October 2010). Annual Review of Resource Economics, Vol. 2, Issue 1, pp. 13-31, 2010. Available at SSRN: https://ssrn.com/abstract=1694339 or http://dx.doi.org/10.1146/annurev.resource.012809.103902

David R. Just (Contact Author)

Cornell University - Dyson School of Applied Economics and Management ( email )

Ithaca, NY
United States
607-255-2086 (Phone)
607-255-9984 (Fax)

Sivalai V. Khantachavana

Cornell University ( email )

Ithaca, NY 14853
United States

Richard E. Just

University of Maryland - Department of Agricultural & Resource Economics ( email )

Symmons Hall, Rm 2200
University of Maryland
College Park, MD 20742-5535
United States
301-405-1289 (Phone)

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