TECHNOLOGICAL CHANGE AND RISK MANAGEMENT: AN APPLICATION TO THE ECONOMICS OF CORN PRODUCTION

Kwansoo Kim and Jean-Paul Chavas ()

No 20605, 2001 Annual meeting, August 5-8, Chicago, IL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The paper investigates the linkages between technological change and production risk, with an application to corn. The effects of technology on risk exposure are characterized based on the properties of the risk premium. We define technological progress to be risk-increasing (risk-decreasing) if it increases (decreases) the relative risk premium. The analysis is applied to panel data from Wisconsin research stations. Conditional moments (including mean, variance and skewness) of corn yield, grain moisture and corn profit are estimated for different sites. We investigate how the trade-off between expected return and the risk premium varies over time and over space. The empirical results indicate that technological progress contributes to reducing the exposure to risk as well as downside risk in corn production, although this effect varies across sites. They also stress the role of the relative maturity of corn hybrid as a means of managing risk.

Keywords: Crop Production/Industries; Research and Development/Tech Change/Emerging Technologies; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 40
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/20605/files/sp01ki02.pdf (application/pdf)

Related works:
Journal Article: Technological change and risk management: an application to the economics of corn production (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea01:20605

DOI: 10.22004/ag.econ.20605

Access Statistics for this paper

More papers in 2001 Annual meeting, August 5-8, Chicago, IL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().