Joint Estimation of Risk Preferences and Technology: Flexible Utility of Futility?

Sergio Lence ()

No 9980, 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The present study sets up a thought experiment calibrated to represent risks of a high-risk production activity (farming), and investigating whether the structure of risk aversion (i.e., the changes in absolute or relative risk aversion associated with changes in wealth) can be estimated with reasonable precision. Findings strongly suggest that typical production data are unlikely to allow identification of the structure of risk aversion. A flexible utility parameterization is found to worsen technology parameter estimates. Findings also indicate that even under a restricted utility specification, the quality of utility parameters estimated from small samples is very poor.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 33
Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/9980/files/sp07le01.pdf (application/pdf)

Related works:
Working Paper: Joint Estimation of Risk Preferences and Technology: Flexible Utility or Futility? (2009)
Journal Article: Joint Estimation of Risk Preferences and Technology: Flexible Utility or Futility? (2007)
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:aaea07:9980

DOI: 10.22004/ag.econ.9980

Access Statistics for this paper

More papers in 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 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 ().