Editor's choice Rice, irrigation and downside risk: a quantile analysis of risk exposure and mitigation on Korean farms

Kwansoo Kim, Jean-Paul Chavas (), Bradford Barham and Jeremy Foltz

European Review of Agricultural Economics, 2014, vol. 41, issue 5, 775-815

Abstract: This article develops a quantile moment approach to evaluate risk exposure and to illustrate risk valuation, and then applies it to examine the relative importance of downside risk and risk mitigation options associated with a highly controlled but stochastic production system on Korean farms. The econometric approach exploits a rich panel dataset to develop consistent and robust econometric estimates of the quantile moments needed to decompose and analyse risk outcomes. The results show that about 90 per cent of the cost of risk on Korean farms comes from exposure to downside risk. We also examine how management factors can help to mitigate risk exposure outcomes.

Date: 2014
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European Review of Agricultural Economics is currently edited by Timothy Richards, Salvatore Di Falco, Céline Nauges and Vincenzina Caputo

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