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Producer preferences for contracts on a risky bioenergy crop

Kwabena Krah (), Daniel Petrolia (), Angelica Williams, Keith Coble (), Ardian Harri and Roderick Rejesus

No 212483, Working Papers from Mississippi State University, Department of Agricultural Economics

Abstract: This study employs a stated choice experiment to identify producer preferences for contracts to produce a risky bioenergy crop. The study develops a theoretical framework that takes into account subjective risk preference and perception information while also accounting for heterogeneous status-quo (i.e., current crop) alternatives. Results from our Random Parameter Logit model indicate that price, biorefinery harvest, and establishment cost-share all had significant positive effects on the probability of a producer accepting a contract, whereas contract length have a negative effect. The study also finds evidence of significant preference heterogeneity in producer preferences for biorefinery harvest, yield insurance, and contract length. Incorporating subjective risk perception and risk preference information, as well as accounting for heterogeneous status-quo alternatives in the decision framework improves overall model performance.

Keywords: Crop Production/Industries; Environmental Economics and Policy; Resource /Energy Economics and Policy; Risk and Uncertainty (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm and nep-upt
Date: 2015-11
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http://ageconsearch.umn.edu/record/212483/files/FINAL_MIS_PAPER.pdf (application/pdf)

Related works:
Journal Article: Producer Preferences for Contracts on a Risky Bioenergy Crop (2018) Downloads
Working Paper: Producer Preferences for Contracts on a Risky Bioenergy Crop (2015) Downloads
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