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Producer Preferences for Contracts on a Risky Bioenergy Crop

Kwabena Krah (), Daniel Petrolia (), Angelica Williams, Keith Coble (), Ardian Harri and Roderick Rejesus

Applied Economic Perspectives and Policy, 2018, vol. 40, issue 2, 240-258

Abstract: We employ a choice experiment to examine producer preferences for contracts to produce a risky bioenergy crop. We develop a framework accounting for subjective risk preferences and perceptions, and heterogeneous status-quo alternatives. Results indicate that price, biorefinery harvest, and establishment cost-share have significant positive effects, whereas contract length has a negative effect. We also find evidence of significant heterogeneity in preferences for biorefinery harvest, yield insurance, and contract length. Incorporating subjective risk perception and risk preference information, as well as accounting for heterogeneous status quo alternatives improves overall model performance.

Keywords: choice experiment; contract; preference heterogeneity; random parameters logit; risk perceptions; risk preferences; willingness to accept compensation (search for similar items in EconPapers)
Date: 2018
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Working Paper: Producer preferences for contracts on a risky bioenergy crop (2015) Downloads
Working Paper: Producer Preferences for Contracts on a Risky Bioenergy Crop (2015) Downloads
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