RISK BALANCING USING FARM LEVEL DATA: AN ECONOMETRIC ANALYSIS

Yan Yan, Ani Katchova and Peter J. Barry

No 20142, 2004 Annual meeting, August 1-4, Denver, CO from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: In the paper, an econometric model is proposed to test the risk balancing hypothesis using farm level data. For the purpose, a constraint on expected utility maximization with respect to farm financial structure is given. Cluster method is applied to pick out the farms on the efficient frontier under expected utility maximization given risk attitude and actual interest rate. Regression results are given and compared to previous findings. Farm characteristics associated with the risk behaviors of farms with optimal utility are identified and compared with other farms.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 19
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea04:20142

DOI: 10.22004/ag.econ.20142

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