THE EFFICIENCY OF OPTIONS COMPARED TO, FIXED PRICE CONTRACTS FOR SHIFTING REVENUE RISK IN CROP PRODUCTION

R.G. Heifner and Gerald Plato

No 278169, 1986 Annual Meeting, July 27-30, Reno, Nevada from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Stochastic simulation is used to compare the probability distributions of revenues from soybean production for pricing with put options and fixed—price contracts. By applying safety first, expected utility, and stochastic dominance criteria, fixed—price contracts are shown to be superior to options for shifting risks under many, but not all, conditions.

Keywords: Crop Production/Industries; Demand and Price Analysis; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 14
Date: 1986-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://ageconsearch.umn.edu/record/278169/files/aaea-1986-110.pdf (application/pdf)

Related works:
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:aaea86:278169

DOI: 10.22004/ag.econ.278169

Access Statistics for this paper

More papers in 1986 Annual Meeting, July 27-30, Reno, Nevada from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)
Bibliographic data for series maintained by AgEcon Search ().