PR - Risk Adjusted Cost Efficiency Indices

Elizabeth Yeager and Michael Langemeier

No 345706, 19th Congress, Warsaw, Poland, 2013 from International Farm Management Association

Abstract: This paper examines the impact of downside risk on cost efficiency for a sample of farms. Cost efficiency was estimated using traditional input and output measures, and then re-estimated including each farm’s downside risk score. Comparisons were made with and without a change in efficiency when each farm’s downside risk score was included in the analysis. As expected, downside risk plays an important role in explaining farm inefficiency. Failure to account for downside risk overstates inefficiency, particularly for farms with low downside risk scores.

Keywords: Agricultural Finance; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 7
Date: 2013
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Journal Article: Risk adjusted cost efficiency indices (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ifma13:345706

DOI: 10.22004/ag.econ.345706

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